Question Details

Which profitability ratio requires the use of earnings per share 




1.	Bogart Company has 40,000 shares of common stock outstanding. The book value per share of this stock was $60 and the market value per share was $75 at the end of the year. Net income for the year was $400,000. Interest on long-term debt was $40,000. Dividends paid to common stockholders were $3 per share. The tax rate was 30%. The company's price-earnings ratio at the end of the year was
a.	7.5.
b.	20.
c.	25.
d.	6.




	2.	A common measure of profitability is
a.	the quick ratio.
b.	times-interest-earned ratio.
c.	return on common stockholders' equity ratio.
d.	debt ratio.


	

	3.	Return on sales is calculated by dividing
a.	sales by cost of goods sold.
b.	gross profit by net sales.
c.	net income by stockholders' equity.
d.	net income by sales.


	

	4.	Which of the following is considered a profitability ratio?
a.	earnings per share
b.	debt ratio
c.	quick ratio
d.	inventory turnover ratio


	

	5.	Which profitability ratio requires the use of earnings per share in its calculation?
a.	price-earnings ratio
b.	return on common stockholders' equity
c.	dividend yield 
d.	return on sales


	



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