Match each ratio to its use. Items may be used more than once. 1. Price-Earnings (P/E) Ratio
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Question:
Match each ratio to its use. Items may be used more than once.
1. Price-Earnings (P/E) Ratio | |
2. Working Capital | |
3. Rate Earned on Total Assets | |
4. Ratio of Liabilities to Stockholders' Equity | |
5. Quick Ratio | |
6. Rate Earned on Common Stockholders' Equity | |
7. Current Ratio | |
8. Ratio of Net Sales to Assets | |
9. Dividends per Share | |
10. Earnings per Share (EPS) on Common Stock |
Uses:
To assess the effectiveness in use of assets
To assess the profitability of the assets
To assess the profitability of the investment by common stockholders
To indicate future earnings prospects
To indicate instant debt-paying ability
To indicate the ability to meet currently maturing obligations
To indicate the extent to which earnings are being distributed to common stockholders
To indicate the margin of safety to creditors
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