Question:medium

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

Updated On: Mar 26, 2026
  • (A), (B) and (D) only
  • (A), (B) and (C) only
  • (A), (B), (C) and (D)
  • (B), (C) and (D) only
Show Solution

The Correct Option is D

Solution and Explanation

This task requires identifying financial metrics classified as profitability ratios. The definitions of each option are provided below:

  • Debt Equity Ratio: This metric quantifies a company's financial leverage by comparing total liabilities to shareholder equity. It is utilized to evaluate a company's financial structure rather than its profitability.
  • Return on Investment (ROI): This metric assesses the efficiency of an investment or compares the effectiveness of multiple investments. It quantifies profitability as a percentage of the initial investment cost.
  • Price Earning Ratio: This ratio values a company by comparing its current share price to its earnings per share. It is used to determine if a company's stock is appropriately valued and is related to profitability.
  • Earnings per Share (EPS): This represents the portion of a company's profit attributed to each outstanding share of common stock, thereby indicating a company's profitability on a per-share basis.

Based on these definitions, Return on Investment (B), Price Earning Ratio (C), and Earnings per Share (D) are indeed profitability ratios.

Therefore, the correct answer is: (B), (C), and (D) only

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