Which Profitability Ratio Requires the Use of Earnings Per Share

question 136

Multiple Choice

Which profitability ratio requires the use of earnings per share in its calculation?

• A) price-earnings ratio
• B) return on common stockholders' equity
• C) dividend yield
• D) return on sales

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Definitions:

Net Investment

Gross investment minus depreciation.

Gross Private Domestic Investment

The aggregate amount of investment in physical assets, such as buildings and machinery, by the private sector within a country.

Military Goods

Products and services specifically designed, manufactured, and supplied for use by armed forces.

Intermediate Products

These are goods that are used as inputs in the production of other goods and services, not intended for final consumption.