Question

All of the following are profitability ratios except A. Profit margin B. Payable turnover C. Asset...

All of the following are profitability ratios except

A. Profit margin B. Payable turnover C. Asset turnover D. Return on assets

Homework Answers

Answer #1

ANSWER IS "B" PAYABLE TURNOVER RATIO

The accounts payable turnover ratio is a short-term liquidity measure used to quantify the rate at which a company pays off its suppliers. Accounts payable turnover ratio is calculated by taking the total purchases made from suppliers, or cost of sales, and dividing it by the average accounts payable amount during the same period.

TOTAL SUPPLIER PURCHASE / AVERAGE ACCOUNT PAYABLES

From the given options you can also observe that profit margin ration,asset turnover ratio and return on assets are inflows to a business they are profits on our investments whereas payable ratio is a outflow

therefore payable ratio is not a profitability ratio

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