Which of the following is considered a profitability ratio?
A)Return on equity
B)Acid test ratio
C)Inventory turnover ratio
D)Debt-to-equity ratio

Question

Quizplus · Accepted Answer

Return on equity (ROE) is a profitability ratio that measures a company's net income as a percentage of shareholder equity. It shows how effectively a company is using its equity to generate profits.

Option B) Acid test ratio, Option C) inventory turnover ratio, and Option D) debt-to-equity ratio are all liquidity ratios, which measure a company's ability to meet short-term financial obligations.

Which of the Following Is Considered a Profitability Ratio