Which ratios primarily measure the returns of the company?
Answer & explanation
Correct answer: option 4
The profitability or financial performance is mainly summarised in the statement
of profit and loss. Profitability ratios are calculated to analyse the earning capacity
of the business which is the outcome of utilisation of resources employed in the
business. There is a close relationship between the profit and the efficiency with
which the resources employed in the business are utilised.