Which Profitability Ratio Requires the Use of Earnings Per Share

question 136

Multiple Choice

Which profitability ratio requires the use of earnings per share in its calculation?

• A) price-earnings ratio
• B) return on common stockholders' equity
• C) dividend yield
• D) return on sales

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Definitions:

Total Expenses

The sum of all costs and expenses incurred by a business during a specific period, including operational, administrative, and selling expenses.

Adjusting Entries

Entries made in the books of account to correct or allocate income and expenses to the appropriate accounting period.

Balance Sheet

A balance sheet is a financial statement that provides a snapshot of a company's financial condition at a specific point in time, detailing assets, liabilities, and shareholders' equity.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenue, expenses, and net income.