Which of the Following Best Describes What a Profitability Ratio

question 34

Multiple Choice

Which of the following best describes what a profitability ratio is?

• A)It shows the relative amount of funds in the business supplied by creditors and shareholders.
• B)It indicates a company's ability to pay short-term debts.
• C)It indicates management's ability to generate a financial return on sales or investment.
• D)It shows the profit margins for the last six months.
• E)It indicates the future profits from the current customer base.

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Definitions:

Technology Level

The current state of technological advancement or development within a society or sector.

Per-worker Production Functions

Per-worker production functions describe the relationship between inputs used per worker (like capital per worker) and the output produced per worker, illustrating productivity.

Upward Shift

describes an increase or improvement in a given metric or condition, often depicted in graphs or charts.

Labor Productivity

A measure of economic performance that compares the amount of goods and services produced with the number of hours worked to produce them.