Profitability ratios show the combined effects of liquidity, asset management, and debt management on operating results.

Question

Quizplus · Accepted Answer

Profitability ratios measure how effectively a company uses its assets and liabilities to generate profits. These ratios take into account liquidity, asset management, and debt management, all of which have an impact on a company's operating results. Therefore, Option A is correct.

Profitability Ratios Show the Combined Effects of Liquidity, Asset Management