Which of the following focuses on the ability of a company to earn profits?
A) The return on total assets
B) The inventory turnover
C) The quick ratio
D) The fixed charge coverage ratio

Question

Quizplus · Accepted Answer

The return on total assets measures a company's ability to generate profits through the efficient use of its assets. The higher the return on total assets, the more profitable the company is. The other ratios listed (inventory turnover, quick ratio, fixed charge coverage ratio) focus on liquidity, efficiency, and solvency, respectively, and are not directly related to profits.

Which of the Following Focuses on the Ability of a Company