The Price-Sales Ratio Helps Measure the Ability of a Firm

question 27

Multiple Choice

The price-sales ratio helps measure the ability of a firm to generate:

• A)net profits.
• B)quality cash flows.
• C)higher earnings per share.
• D)higher cash flow per share.
• E)revenue growth.

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Definitions:

Interest Rates

The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.

Aggregate Demand

The total amount of goods and services demanded in an economy at a given overall price level and in a given time period.

Price Level

A measure of the average prices of goods and services in an economy at a given time, indicating the cost of living or inflation rate.

Dividend Yield

An economic indicator demonstrating the ratio of a company's annual dividends to its stock price.