Which of the Ratios Listed Helps to Indicate the Ability

question 37

Multiple Choice

Which of the ratios listed helps to indicate the ability of a company to generate a return on its assets before considering the cost of financing those assets?

• A) current ratio
• B) profit margin
• C) quick ratio
• D) return on assets.

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Definitions:

Units

A measure of quantity, whether referring to the products manufactured, services provided, or another quantifiable resource.

Fixed Costs

Fixed costs are expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.

Total Dollar Amount

The complete sum of all monetary figures in question, without considering the breakdown of components that constitute this total.

Activity Changes

Refers to alterations in the volume or pace of operations or transactions within a business over a period.