Which ratio compares profit to some measure of resources invested?
A) profitability ratio
B) asset management ratio
C) liquidity ratio
D) leverage ratio

Question

Quizplus · Accepted Answer

The profitability ratio compares profits to measures of resources invested, such as sales or assets, and is specifically designed to assess the profit-generating ability of a company relative to its resources. The other answer options—asset management, liquidity, and leverage ratios—each measure different aspects of a company's financial health, but do not directly compare profits with resources invested.

Which Ratio Compares Profit to Some Measure of Resources Invested