A Common Measure of Profitability Is the

question 2

Multiple Choice

A common measure of profitability is the

• A)current ratio.
• B)cash current debt coverage ratio.
• C)return on common shareholders' equity ratio.
• D)debt to total assets ratio.

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Definitions:

Consumables

Items or products that are intended to be used up and replaced.

Inflationary Premium

The component of interest rates or yields on financial instruments that compensates investors for the anticipated erosion of purchasing power due to inflation.

Interest Rate

The percentage at which interest is paid by a borrower for the use of money they borrow from a lender.

Loanable Funds

Financial resources available for borrowing, often within the context of a market setting interest rates.