If a Financial Analyst Wants to Measure the Relationship Between

question 204

Multiple Choice

If a financial analyst wants to measure the relationship between profitability and the investment made by stockholders, the analyst should use the

• A)return on equity ratio.
• B)earnings per share.
• C)net profit margin percentage.
• D)operating margin percentage.

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Definitions:

Borrower

An individual or entity that takes out a loan from another entity or individual under the agreement to repay the amount borrowed, typically with interest.

Creditor

An individual, company, or institution that lends money or extends credit to another party, expecting to be repaid in the future.

Discount Rate

The interest rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows.

Borrower

An individual or entity that receives funds from a lender under the condition of returning it over time, with interest.