Which of the following combinations of ratios will best analyze a company's income statement performance?
A)gross profit percentage, return on common equity, and debt-to-equity
B)gross profit percentage, earnings per share, and net profit margin percentage
C)gross profit percentage, current ratio, and return on common equity
D)gross profit percentage, net profit margin percentage, and debt-to-equity

Question

Quizplus · Accepted Answer

Gross profit percentage, earnings per share, and net profit margin percentage are directly related to a company's income statement performance. Gross profit percentage indicates the efficiency of production and sales, earnings per share show the profitability on a per-share basis, and net profit margin percentage reflects the overall profitability after all expenses.

Which of the Following Combinations of Ratios Will Best Analyze