Profitability Ratios Multiple Choice Questions with Answers – PDF Download

MCQ 1: The net income available to stockholders is $125 and total assets are $1,096 then return on common equity would be:

1. 0.00114
2. 0.114
3. 0.12
4. 0.12

MCQ 2: The formula such as, net income available for common stockholders divided by total assets is used to calculate:

1. return on total assets
2. return on total equity
3. return on debt
4. return on sales

MCQ 3: The net income available to stockholders is $150 and total assets are $2,100 then return on total assets would be:

1. 0.0007
2. 0.0714
3. 0.05
4. 7.15

MCQ 4: A formula such as net income available to common stockholders divided by common equity is used to calculate:

1. return on earnings power
2. return on investment
3. return on common equity
4. return on interest

MCQ 5: A company's low earnings power and high interest cost cause financial changes, which have:

1. high return on equity
2. high return on assets
3. low return on assets
4. low return on equity