Which of the Following Ratios May Be Used to Measure

question 5

Multiple Choice

Which of the following ratios may be used to measure a company's quality of earnings?

• A) Price-earnings ratio
• B) Return on assets ratio
• C) Current ratio
• D) Times interest earned ratio

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Definitions:

Tile Manufacturer

A company specializing in the production of tiles, which are pieces of hard-wearing material such as ceramic, stone, or metal used for covering roofs, floors, walls, or other objects.

Selling Price

The amount charged to customers for goods or services, determining the revenue generated from sales.

Sales Volume

The number of units of a product sold in a particular period, indicative of the level of demand and operational success.

Net Operating Income

A company's income after operating expenses are subtracted but before deducting taxes and interest charges.