Which of the Following Ratios Helps Evaluate How Well a Company

question 51

Multiple Choice

Which of the following ratios helps evaluate how well a company is earning profit for the common stockholders?

• A) Times interest earned ratio
• B) Return on sales ratio
• C) Return on total assets
• D) Rate of return on common stockholders' equity

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Definitions:

Purchasing Inventory

The process of buying goods and materials that a company holds for the ultimate goal of resale or for use in producing other goods.

Purchase Requisition

A document or request made within an organization for the purchase of goods or services, initiating the procurement process.

Inventory Item

A specific product or good that a company holds for the purpose of selling to customers.

Business Activities

Operations, tasks, and functions carried out by a company in the pursuit of its economic objectives.