Which of the Following Ratios Gives Information on the Amount

question 13

Multiple Choice

Which of the following ratios gives information on the amount of profits reinvested in the firm over the years:

• A) Sales/total assets
• B) Debt/total assets
• C) Debt/equity
• D) Retained earnings/total assets
• E) None of these

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Definitions:

Economic Value

A measure of the benefit provided by a good or service to an economic agent.

Payments

Transfers of money, or other agreed-upon medium, from one party to another in exchange for goods, services, or to fulfill a legal obligation.

Compounded Quarterly

Interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan on a quarterly basis.

Loan

A sum of money that is borrowed, usually from a financial institution or individual, which is expected to be paid back with interest.