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Which ratio would be best to compare three companies in terms of how well they are managing their expenses? Assume the three firms are in

Which ratio would be best to compare three companies in terms of how well they are managing their expenses?

Assume the three firms are in the same industry, produce similar products and are similar in nature to each other (ex: Nike vs Underarmour, etc...) (look through the below ratios in your notes/formula sheet/book so you understand what they are trying to measure)

Multiple Choice

  • Return on Equity

  • Profit Margin

  • Interest Coverage Ratio (Times interest Earned)

  • Equity Multiplier

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