Which of the following is NOT classified as a Profitability Ratio?
- APrice Earning Ratio
- BProprietary Ratio
- CEarnings Per Share
- DOperating Ratio
Solution & Step-by-step Explanation
Ratios are grouped into broad categories:Profitability Ratios: Evaluate performance metrics (e.g., Operating Ratio, EPS, Price-Earnings Ratio, Gross Profit Ratio).Solvency Ratios: Assess long-term financial viability and obligations management. The Proprietary Ratio is a classic Solvency Ratio expressing the relationship of proprietor’s funds to total assets.