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

Answer rating: 100% (QA)

1To indicate future earnings prospects 2 To indicate the ability to meet currently maturin... View the full answer