{"id":53862,"date":"2024-04-16T00:00:20","date_gmt":"2024-04-16T00:00:20","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=53862"},"modified":"2024-04-16T00:00:20","modified_gmt":"2024-04-16T00:00:20","slug":"best-indicator-of-the-overall-efficiency-of-a-business-concern-is","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/best-indicator-of-the-overall-efficiency-of-a-business-concern-is\/","title":{"rendered":"Best indicator of the overall efficiency of a business concern is:"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;Profitability ratio&#8221; option2=&#8221;Debt equity ratio&#8221; option3=&#8221;Acid test ratio&#8221; option4=&#8221;Current ratio&#8221; correct=&#8221;option1&#8243;]<!--more--><\/p>\n<p>The correct answer is A. Profitability ratio.<\/p>\n<p>A profitability ratio is a financial ratio that measures a company&#8217;s ability to generate profit from its revenue. Profitability ratios are used to compare a company&#8217;s performance to its peers and to its own historical performance.<\/p>\n<p>There are many different types of profitability ratios, but some of the most common include:<\/p>\n<ul>\n<li>Return on assets (ROA): This ratio measures a company&#8217;s net income as a percentage of its total assets.<\/li>\n<li>Return on equity (ROE): This ratio measures a company&#8217;s net income as a percentage of its total equity.<\/li>\n<li>Return on sales (ROS): This ratio measures a company&#8217;s net income as a percentage of its total sales.<\/li>\n<\/ul>\n<p>Profitability ratios are important because they provide a measure of a company&#8217;s ability to generate profits. This information can be used to assess a company&#8217;s financial health and to make investment decisions.<\/p>\n<p>The other options are not as good indicators of overall efficiency because they do not measure a company&#8217;s ability to generate profits.<\/p>\n<ul>\n<li>Debt equity ratio: This ratio measures a company&#8217;s debt as a percentage of its equity. It is a measure of a company&#8217;s financial leverage.<\/li>\n<li>Acid test ratio: This ratio measures a company&#8217;s ability to meet its short-term obligations. It is calculated by dividing a company&#8217;s current assets by its current liabilities.<\/li>\n<li>Current ratio: This ratio measures a company&#8217;s ability to meet its short-term obligations. It is calculated by dividing a company&#8217;s current assets by its current liabilities.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;Profitability ratio&#8221; option2=&#8221;Debt equity ratio&#8221; option3=&#8221;Acid test ratio&#8221; option4=&#8221;Current ratio&#8221; correct=&#8221;option1&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[85],"tags":[],"class_list":["post-53862","post","type-post","status-publish","format-standard","hentry","category-accounting","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Best indicator of the overall efficiency of a business concern is:<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/best-indicator-of-the-overall-efficiency-of-a-business-concern-is\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Best indicator of the overall efficiency of a business concern is:\" \/>\n<meta property=\"og:description\" content=\"[amp_mcq option1=&#8221;Profitability ratio&#8221; 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