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michael garzon
on Nov 02, 2024

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Which ratios are designed to evaluate a firm's ability to generate revenues in excess of operating costs and other expenses?

A) Activity
B) Liquidity
C) Profitability
D) Debt

Profitability Ratios

Financial metrics used to evaluate a company's ability to generate earnings relative to its revenue, assets, equity, or other financial metrics.

Revenues

The total amount of income generated by the sale of goods or services related to the company's primary operations.

Operating Costs

Expenses associated with running a business on a daily basis, such as salaries, rent, and utilities.

  • Determine the significance of profitability ratios in assessing a company's financial health.
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AG
Alvaro GurreaNov 06, 2024
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