Ratios that measure how efficiently a firm manages its assets and operations to generate net income are referred to as ________ ratios.
A) asset management
B) long-term solvency
C) short-term solvency
D) profitability
E) turnover

Question

Quizplus · Accepted Answer

Profitability ratios are the ratios that measure a company's ability to generate earnings relative to sales, assets, and equity. This includes gross profit margin, net profit margin, return on assets, and return on equity ratios.

Ratios That Measure How Efficiently a Firm Manages Its Assets