Practicing Success
Identity the Ratio which helps in the analysis of profit in relation to revenue from operations or funds. |
Solvency Ratio Liquidity Ratio Profitability Ratios Activity Ratio |
Profitability Ratios |
The correct answer is Option (3) - Profitability Ratios 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. |