Which one of the following sets of ratios would generally be of the most interest to stockholders?
A)Return on assets and profit margin
B)Quick ratio and times interest earned
C)Price-earnings ratio and debt-equity ratio
D)Return on equity and price-earnings ratio
E)Cash coverage ratio and equity multiplier

Question

Quizplus · Accepted Answer

Return on equity and price-earnings ratio are both important ratios to stockholders. Return on equity measures the profitability of the company from the perspective of the stockholders, while the price-earnings ratio is a measure of how much investors are willing to pay for a company's earnings. Both of these ratios are important indicators of a company's financial performance and can greatly influence stockholders' investment decisions.

Which One of the Following Sets of Ratios Would Generally