A common measure of profitability is the
A)asset turnover.
B)debt to equity ratio.
C)current ratio.
D)receivable turnover.

Question

Quizplus · Accepted Answer

The asset turnover ratio measures how efficiently a company uses its assets to generate revenue. A higher asset turnover ratio indicates better profitability. The debt to equity ratio and current ratio measure a company's financial stability rather than its profitability. The receivable turnover ratio measures how efficiently a company collects payments from its customers, which is related to profitability but not a direct measure of it.

A Common Measure of Profitability Is the