How many of these ratios measure the adequacy of profits?
$\bullet$Profit before interest and finance costs/ finance costs
$\bullet$Profit compared to total assets
$\bullet$Profit compared to sales
$\bullet$Profit compared to equity
A) 1
B) 2
C) 3
D) 4

Question

Quizplus · Accepted Answer

Three of these ratios measure the adequacy of profits: Profit before interest and finance costs/ finance costs, Profit compared to total assets, and Profit compared to sales. The ratio of Profit compared to equity measures the return on investment, but not necessarily the adequacy of profits.

How Many of These Ratios Measure the Adequacy of Profits ∙\bullet∙

How Many of These Ratios Measure the Adequacy of Profits $\bullet$