Target Exam

CUET

Subject

-- Accountancy Part B

Chapter

Accounting Ratios

Question:

Which of the following are the Profitability Ratios:

(A) Debt Equity Ratio
(B) Return on Investment
(C) Price Earning Ratio
(D) Earning per share

Choose the correct answer from the options given below:

Options:

(A), (B) and (D) only

(A), (B) and (C) only

(A), (B), (C) and (D)

(B), (C) and (D) only

Correct Answer:

(B), (C) and (D) only

Explanation:

The correct answer is Option (4) → (B), (C) and (D) only.

(A) Debt Equity Ratio- solvency ratio
(B) Return on Investment- Profitability Ratio
(C) Price Earning Ratio- Profitability Ratio
(D) Earning per share- Profitability Ratio

 

Profitability ratios delve into a company's capacity to generate earnings based on the utilization of its resources. Prominent profitability ratios include the Gross Profit ratio, Operating ratio, Net Profit Ratio, Return on Investment (ROI) or Capital Employed, Earnings per Share (EPS), Book Value per Share, Dividend per Share, and Price/Earnings (P/E) ratio.