Match the Ratios with Their Formulas by Entering the Appropriate

question 117

Multiple Choice

Match the ratios with their formulas by entering the appropriate letter in the space provided.
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(Net income - preferred dividends) /Average common shares outstanding

• A)Current ratio
• B)Price-earnings ratio
• C)Profit margin
• D)Asset turnover
• E)Earnings per share
• F)Times interest earned
• G)Inventory turnover
• H)Average collection period
• I)Days in inventory
• J)Payout ratio

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Definitions:

Insurance Contract

A legally binding agreement between an insurer and the insured, detailing the terms for the payment of claims under certain conditions.

Securities Act

A law or legislation that regulates the issuance and sale of securities to protect investors against misrepresentation, deceit, and other frauds.

Proxy

A document evidencing the transfer of a shareholder’s voting right to an appointee, either with instructions for voting, or allowing discretion to be exercised by the appointee, at a meeting of shareholders of the corporation.

Transferred Right

Involves transferring a legal right from one party to another, which could include property rights, contractual rights, or other legal entitlements.