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which of the following is not considered to be a profitability ratio? profit margin, return on...

which of the following is not considered to be a profitability ratio? profit margin, return on assets ( investment ), times interest earned, return in equity

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Answer #1

The Answer is “ Times Interest Earned Ratio “

- Time Interest Earned Ratio shall not considered as a profitability ratio

- Profitability Ratios measure the company’s ,management effectiveness as a percentage of profit earned over the sales and other investments.

- Whereas Times interest earned ratio is a measure used by the company to measure a enterprises ability to cover their debts.

- Times interest earned ratio is called as Leverage Ratio

- Times interest earned ratio = [ Net Income + Income Tax Expenses + Interest Expenses ] / Interest Expenses

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