________ are ratios with some measure of profit in the numerator and some measure of firms' size or assets in the denominator.
A) Liquidity ratios
B) Leverage ratios
C) Activity ratios
D) Profitability ratios

Question

Quizplus · Accepted Answer

Profitability ratios measure how effectively a company is generating profits from its operations. They compare some measure of profit (such as net income or gross profit) to some measure of the company's size or assets (such as revenue or total assets). Examples of profitability ratios include return on assets (ROA), return on equity (ROE), and gross profit margin.

________ Are Ratios with Some Measure of Profit in the Numerator