Common measurof a company's profitability include:

Question

Quizplus · Accepted Answer

Both price-earnings ratio and earnings per share are commonly used measures of a company's profitability. The price-earnings ratio compares a company's current stock price to its earnings per share and is often used by investors to evaluate a company's potential for growth. Earnings per share, on the other hand, is calculated by dividing a company's net income by the number of outstanding shares of stock and indicates how much profit is being generated per share. Both measures provide valuable insight into a company's profitability, making choice C the best answer. The quick ratio, however, is a measure of a company's liquidity and does not reflect its profitability.

Common Measurof a Company's Profitability Include