1.

Which profitability ratio requires the use of earnings per share and the current market price?

a.Dividend yield ratio.

b.Price/earnings ratio.

c.Dividend payout ratio.

d.Return on common stockholders' equity.

2.

Squid Lips, Inc. wants to measure the relationship between profitability and the investment made by stockholders. Squid Lips should use the

a.return on stockholders' equity ratio.

b.statement of retained earnings.

c.profit margin.

d.earnings per share.

3.

Starship Inc.'s gross profit ratio decreased from 36.5% in 2017 to 28.6% in 2018. What is the trend in this change?

a.It depends on whether net sales increased or decreased during the period.

b.It is a downward negative trend.

c.It is an upward positive trend.

d.Trends cannot be determined without the dollar amount of the increase provided.

4.

Which profitability ratio requires the use of earnings per share in its calculation?

a.Price/earnings ratio.

b.Return on common stockholders' equity.

c.Profit margin.

d.Dividend yield ratio.