Question

Which of the following focuses on the ability of a company to earn profits? Select one: a. The inventory turnover b. The quick ratio c. The return on total assets d. The fixed charge coverage ratio

Answer 1

Answer:

c. The return on total assets

Explanation:

The inventory turnover deals with the turnover of inventory during the period i.e in how many times the inventory is sold or rejected or replaced, etc

The quick ratio checks the liquidity position of the company

The return on total assets refers to the profit gains on the total assets average

And, the fixed charge coverage ratio shows the payment of its all debts with the available earnings

So for earning profits, the return on total assets is a better option