Return ratios are measures of the relationship between the
A)profit earned and the investment made in the company by the various groups of creditors and investors.
B)revenue earned and the total equity of a company.
C)total equity of a company and its cash flows for the period.
D)profitability and liquidity aspects of a company.

Question

Quizplus · Accepted Answer

Return ratios measure the profit earned by a company in relation to the investment made by its creditors and investors. It is a measure of the company's efficiency in generating profits from the resources invested in it. Examples of return ratios include return on assets (ROA), return on equity (ROE), and return on investment (ROI). Therefore, option A is the correct answer.

Return Ratios Are Measures of the Relationship Between the