Match Each Ratio That Follows to Its Use (Items A-H)

question 54

Multiple Choice

Match each ratio that follows to its use (items a-h) . Items may be used more than once.
-return on common stockholders' equity

• A)assess the profitability of the assets
• B)assess how effectively assets are used
• C)indicate the ability to pay current liabilities
• D)indicate how much of the company is financed by debt and equity
• E)indicate instant debt-paying ability
• F)assess the profitability of the investment by common stockholders
• G)indicate future earnings prospects
• H)indicate the extent to which earnings are being distributed to common stockholders

---

Definitions:

Competence

The ability or skill of an individual or organization to effectively perform or carry out a particular task or role.

Basic Information System

A foundational structure that collects, stores, manages, and distributes information for the purpose of improving decision-making and coordination.

External Users

Individuals or entities outside of an organization who are interested in its financial information, such as investors, creditors, and analysts.

Historical Data

Information from the past used for analysis to understand trends, patterns, and to plan future moves.