Which of the following ratios is most useful in indicating a company's profitability?
A)Operating cash flow ratio
B)Operating margin percentage
C)Dividend payout ratio
D)Dividend yield ratio

Question

Quizplus · Accepted Answer

The operating margin percentage is the most useful ratio in indicating a company's profitability because it shows the percentage of revenue that is left after deducting operating expenses. This ratio reflects the company's ability to generate profits from its core business activities. The operating cash flow ratio, dividend payout ratio, and dividend yield ratio are important indicators of a company's financial health, but they do not directly reflect its profitability.

Which of the Following Ratios Is Most Useful in Indicating