Match Each Ratio That Follows to Its Use (Items A-H)

question 21

Multiple Choice

Match each ratio that follows to its use (items a-h) . Items may be used more than once.
-Price-earnings
(P/E) ratio

• A)Assess the profitability of the assets
• B)Assess how effectively assets are used
• C)Indicate the ability to pay current liabilities
• D)Indicate how much of the company is financed by debt and equity
• E)Indicate instant debt-paying ability
• F)Assess the profitability of the investment by common stockholders
• G)Indicate future earnings prospects
• H)Indicate the extent to which earnings are being distributed to common stockholders

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