Which of the Following Ratios Measures a Firm's Potential Earnings

question 36

Multiple Choice

Which of the following ratios measures a firm's potential earnings?

• A) Short-term solvency ratio
• B) Long-term solvency ratio
• C) Profitability ratio
• D) Activity ratio
• E) Equity ratio

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Definitions:

Boston

A historic city in Massachusetts, United States, one of the oldest cities in the country, and site of several key events during the American Revolution, such as the Boston Tea Party and the Battle of Bunker Hill.

American Revolution

The period of political and military conflict (1775-1783) between the Thirteen Colonies and the British Empire, leading to the independence of the United States.

Instigating

The act of provoking or initiating an event, action, or situation, often with the intention of causing something specific to happen.

Part

A portion or division of a whole that is separate or distinct; an element or component of something.