The ________ Ratio Measures the Return Earned on the Common

question 37

Multiple Choice

The ________ ratio measures the return earned on the common stockholders' investment in the firm.

• A)net profit margin
• B)price/earnings
• C)return on equity
• D)return on total assets

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Definitions:

Firms' Revenues

The total income generated by businesses from selling their goods or services before any expenses are deducted.

Personal Savings

The portion of an individual’s income that is not spent on consumption and is set aside for future use, typically in a savings account or investment.

Marginal Cost

The increase in cost that arises from producing one additional unit of a product or service.

R&D Financing

The process of funding research and development activities, typically involving significant investment in innovation and technology to spur growth and competitive advantage.