Asked by
Larkin Patrick Barayang
on Nov 08, 2024
Verified
The financial ratio measured as the price per share of stock divided by earnings per share is known as the:
A) Return on assets.
B) Return on equity.
C) Debt-equity ratio.
D) Price-earnings ratio.
E) Du Pont identity.
Price-Earnings Ratio
A valuation ratio of a company's current share price compared to its per-share earnings, used to evaluate if a stock is over or under-valued.
Earnings Per Share
The amount of earnings a company makes, divided by its outstanding common shares, which reveals the firm's level of profitability.
Return on Assets
A financial ratio indicating the profitability of a company relative to its total assets, measuring how effectively a company uses its assets to generate earnings.
- Gain insight into the principles and use of financial ratios for the assessment of business performance.
- Grasp the significance of key financial ratios in evaluating long-term solvency and operational efficiency.
Verified Answer
VW
Learning Objectives
- Gain insight into the principles and use of financial ratios for the assessment of business performance.
- Grasp the significance of key financial ratios in evaluating long-term solvency and operational efficiency.