Which of the following is not a profitability ratio? A company had a stock price
ID: 2501083 • Letter: W
Question
Which of the following is not a profitability ratio? A company had a stock price of $45 per share, earnings per share of $0.75, and dividends per share of $0.20. What is the company's price/earnings ratio? Company A and B are competitors in the same industry. Company A has cost of sales of $405,000 and average inventory of $37,000, while Company B has cost of sales of $233,000 and average inventory of $39,000. Which of the following is true? Mathison Company had net sales revenue of $1,678,000, net income of $230,000, cost of goods sold of $342,000, and total assets of $2,400,000. Which of the following is true? Which of the following does not have a direct effect on inventory turnover?Explanation / Answer
35) Option A. Times interest earned ratio is not a profitability ratio.
Explanation:- Times interest earned ratio is Capital structure ratio or Leverage ratio. It is not a profitability ratio. Therefore, Option A (Times interest earned ratio) is the right answer.
36) Price/earning ratio (PE Ratio) = Market price per share / Earning per share
= 45 / 0.75
= 60 [ Option B is the right answer. ]
38) Mathison earns $ 0.14 in profit for every dollar of sales. The option C is the right answer.
Explanation :- 230000 / 1678000 = 0.14 (approx)
37) The option B is the right answer. Company A appears to be managing inventory better than company B.
Explanation:- The inventory turnover ratio of company A is greater than company B. Therefore, Company A is efficient and accordingly,Company A appears to be managing inventory better than company B.
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