Which of the Following Ratios Is Given the Highest Significance

question 17

Multiple Choice

Which of the following ratios is given the highest significance rating by controllers?

• A)Current Ratio
• B)Earning Per Share
• C)Return on Equity - After Tax
• D)Return on Assets - After Tax
• E)Price/Earnings Ratio

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Definitions:

Debt Investments-HTM

Investments in debt securities intended to be held to maturity, accounting for fixed-income investments until they are redeemed.

Bonds Mature

The point in time when a bond's principal amount is due to be paid back to the bondholder.

Interest Payments

Payments made to a lender by a borrower in return for the use of borrowed money, typically represented as an annual percentage of the loan principal.

Unrealized Gain

An increase in the value of an asset that has not been sold yet; hence, the gain is not reflected in the income statement.