Question

Which of the following are the Profitability Ratios?
(A) Debt Equity Ratio
(B) Return on Investment
(C) Price Earning Ratio
(D) Earning per share

• A. (A), (B) and (D) only
• B. (A), (B) and (C) only
• C. (A), (B), (C) and (D)
• D. (B), (C) and (D) only

Answer 1

Answer: (D)

(B), (C) and (D) only

Answer 2

Return on Investment (ROI) is a profitability ratio as it measures how efficiently a company generates profits from its investments. - Price Earning Ratio (P/E Ratio) is related to profitability because it shows the relationship between the company’s earnings and its share price. - Earnings per Share (EPS) is a key indicator of profitability as it represents the portion of a company’s profit allocated to each outstanding share. - Debt Equity Ratio, however, is a solvency ratio, not a profitability ratio.