Which of the Following Ratios Usually Is Not Considered to Be

question 90

Multiple Choice

Which of the following ratios usually is not considered to be a test of profitability?

• A) Current ratio.
• B) Net profit margin.
• C) Return on assets.
• D) Earnings per share.

Recognize the importance of gross profit margin, how it’s calculated, and its distinction from the gross profit amount.

Identify the components and structure of the statement of income under different inventory systems.

Comprehend the classification and impact of purchase returns, allowances, and discounts on financial statements.

Grasp the significance of operating expenses and their relation to profit margin.

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Definitions:

CEOs

Chief Executive Officers, the highest-ranking individuals in a company, responsible for making major corporate decisions, managing operations, and communicating with the board of directors.

United States

A federal republic in North America comprising 50 states, a federal district, and various territories, known for its large economy and influential role in global affairs.

Japan

An island nation in East Asia, known for its rich cultural heritage, technological innovation, and significant economic power.

Economies of Scale

Cost advantages achieved when an enterprise increases production and efficiency, reducing the cost per unit.