All of the Following Ratios Measure the Profitability of a Company

question 127

Multiple Choice

All of the following ratios measure the profitability of a company except:

• A) rate of return on net sales
• B) earnings per common share
• C) current ratio
• D) rate of return on total assets

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Definitions:

Firms Combined

Firms Combined typically refers to the merger or consolidation of two or more businesses to form a single combined entity, often aiming for operational efficiencies and expanded market share.

Separate Values

Separate Values pertains to distinctly evaluating different assets, liabilities, or components for financial, analytical, or assessment purposes.

Synergies

The additional value created by combining two or more companies or assets, expected to lead to greater efficiency or profitability.

NPV

Net Present Value; a method used in capital budgeting to evaluate the profitability of an investment or project by calculating the difference between the present value of cash inflows and outflows.