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Profitability ratios Profitability ratios help assess a firm's ability to generate earnings as compared to the expenses and other costs incurred to support its earnings.
Profitability ratios Profitability ratios help assess a firm's ability to generate earnings as compared to the expenses and other costs incurred to support its earnings. Assume that you have the following data for Companies A, B, and C in the same industry: Based on the information given, calculate the profitability ratios for these companies in the following table. Convert all calculations to a percentage and enter the values rounded to two decimals. Based on your understanding of profitability ratios, which of the follow earn the highest rate of return on their investment? Company C Company A Company B
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