Ratios used to determine whether or not a company can earn a satisfactory rate of return are ________.
A)liquidity ratios
B)solvency ratios
C)profitability ratios
D)market indicators

Question

Quizplus · Accepted Answer

Profitability ratios, such as return on assets (ROA) and return on equity (ROE), are used to measure a company's ability to generate profits and earn a satisfactory rate of return. Liquidity ratios measure a company's ability to meet short-term obligations, solvency ratios evaluate a company's long-term financial health, and market indicators reflect the performance of a company's stock in the stock market.

Ratios Used to Determine Whether or Not a Company Can