What do profitability ratios measure?, A) Liquidity, B) Ability to generate profit, C) Debt level, D) Cash flow, Which ratio shows how much profit a company makes from sales?, A) Current ratio, B) Gross profit margin, C) Debt ratio, D) Inventory turnover, Gross Profit = ?, A) Sales - Expenses, B) Sales - Cost of Goods Sold, C) Assets - Liabilities, D) Revenue - Taxes, Net Profit Margin is calculated as:, A) Net profit ÷ Sales, B) Sales ÷ Net profit, C) Assets ÷ Liabilities, D) Expenses ÷ Revenue, If net profit increases while sales stay the same, net profit margin will:, A) Decrease, B) Stay the same, C) Increase, D) Become zero, Return on Assets (ROA) measures:, A) Sales efficiency, B) Profit from assets, C) Debt management, D) Cash flow, ROA formula is:, A) Net profit ÷ Total assets, B) Sales ÷ Assets, C) Profit ÷ Liabilities, D) Revenue ÷ Equity, Return on Equity (ROE) shows:, A) Profit for shareholders, B) Sales growth, C) Expenses level, D) Inventory value, ROE formula is:, A) Net profit ÷ Equity, B) Sales ÷ Equity, C) Assets ÷ Equity, D) Profit ÷ Sales, If a company has high profitability ratios, this means:, A) It is losing money, B) It is efficient in generating profit, C) It has high debt, D) It has low sales

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