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    Question

    Which of the following is considered a profitability

    measure?
    A Days sales in inventory Correct Answer Incorrect Answer
    B Fixed asset turnover Correct Answer Incorrect Answer
    C Price-earnings ratio Correct Answer Incorrect Answer
    D Cash coverage ratio Correct Answer Incorrect Answer
    E Return on Assets Correct Answer Incorrect Answer

    Solution

    The profitability measure among the options provided is e. Return on Assets. Return on Assets (ROA) is a financial ratio that calculates the profit generated by a company relative to its total assets. It indicates how efficiently a company utilizes its assets to generate profits. The other options, such as days sales in inventory, fixed asset turnover, price-earnings ratio, and cash coverage ratio, are important financial metrics but do not specifically focus on profitability.

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