Earnings Per Share, Return on Sales, and Return on Equity

question 250

Multiple Choice

Earnings per share, return on sales, and return on equity are examples of

• A) leverage ratios.
• B) liquidity ratios.
• C) equity ratios.
• D) profitability ratios.

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Definitions:

Income Elasticity of Demand

Income elasticity of demand measures how the quantity demanded of a good or service changes in response to a change in consumers' income.

Quantity Demanded

In economics, the total amount of a good or service that consumers are willing and able to purchase at a given price.

Income

The financial gain received by an individual or household, usually derived from work, investments, or other sources, over a period.

Own Price Elasticity

The responsiveness of the quantity demanded of a good to a change in its own price, holding other factors constant.