Which Financial Indicator Shows the Current Market's Evaluation of a Stock,based

question 2

Multiple Choice

Which financial indicator shows the current market's evaluation of a stock,based on its earnings?

• A) debt to asset ratio
• B) price/earnings ratio
• C) coverage of fixed charges
• D) debt to equity ratio
• E) times interest earned

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Definitions:

Selling Costs

Expenses directly related to the sale of a product or service, including advertising, sales commissions, and packaging costs.

FOB Destination

A shipping term indicating that goods are delivered at the seller’s expense to a specific location, with ownership transferring to the buyer upon delivery.

FOB Shipping Point

A term indicating that the buyer assumes responsibility for shipping costs and liability once the goods leave the seller's premises.

Legal Title

Legal ownership of property or assets, which includes the right to use, sell or transfer them.