Which of the following ratios helps evaluate how well a company is earning profit for the common stockholders?
A) Times interest earned ratio
B) Return on sales ratio
C) Return on total assets
D) Rate of return on common stockholders' equity

Question

Quizplus · Accepted Answer

The rate of return on common stockholders' equity ratio specifically measures the profitability for common shareholders by showing how much profit a company generates with the money shareholders have invested. This is directly related to the earnings available to common stockholders.

Which of the Following Ratios Helps Evaluate How Well a Company