Which of the following is included in the profitability ratios of a company?

A) Gross profit ratio
B) Earning per share
C) Inventory turnover ratio
D) Dividend per share
E) Operating ratio
F) Price earning ratio
G) Book value per share

Choose the correct answer from the options given below.

ABDEFG

The correct answer is option 4- ABDEFG.

A) Gross profit ratio- Profitability ratio
B) Earning per share- Profitability ratio
C) Inventory turnover ratio- Activity ratio
D) Dividend per share- Profitability ratio
E) Operating ratio- Profitability ratio
F) Price earning ratio- Profitability ratio
G) Book value per share- Profitability ratio

** PROFITABILITY RATIOS-  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. The various ratios which are commonly used to analyse the profitability of the business are:

• 1. Gross profit ratio
• 2. Operating ratio
• 3. Operating profit ratio
• 4. Net profit ratio
• 5. Return on Investment (ROI) or Return on Capital Employed (ROCE)
• 6. Return on Net Worth (RONW)
• 7. Earnings per share
• 8. Book value per share
• 9. Dividend payout ratio
• 10. Price earning ratio.