Asked by Cristian Coronado on Jun 15, 2024
Verified
Profitability ratios show the combined effects of liquidity,asset management,and debt management on operating results.
Profitability Ratios
A group of ratios that show the combined effects of liquidity, asset management, and debt on operations.
Liquidity
The ease with which an asset can be converted into cash without affecting its market price.
Asset Management
The process of overseeing and optimizing the performance of a set of assets in a way that aligns with the investor's objectives.
- Appreciate the role of profitability ratios in assessing the combined effects of liquidity, asset management, and debt on operating results.
Verified Answer
JD
jasmine davisJun 19, 2024
Final Answer :
True
Explanation :
Profitability ratios measure a company's ability to generate profits from its operations, and they take into account various factors including liquidity, asset management, and debt management. Therefore, they reflect the combined effects of these factors on a company's operating results.
Learning Objectives
- Appreciate the role of profitability ratios in assessing the combined effects of liquidity, asset management, and debt on operating results.