Which of the following measures would assist in assessing the profitability of a company?
A)Asset turnover.
B)Times interest earned ratio.
C)Inventory turnover ratio.
D)Debt to assets ratio.

Question

Quizplus · Accepted Answer

Asset turnover measures a company's ability to generate revenue from its assets. It indicates how efficiently a company is using its assets to generate sales. A higher asset turnover ratio implies that a company is generating more revenue from its assets, which could translate into higher profits. Therefore, this measure would help in assessing the profitability of a company. The other options do not directly relate to profitability.

Which of the Following Measures Would Assist in Assessing the Profitability