Question
Question 5 Which of the following is considered a fundamental measure for shareholders wishing to assess the returns on their investments: Gearing Ratio Current ratio Earnings per share ratio Inventory turnover period ratio Interest cover ratio
Answer
4.1
(141 Votes)
Trevor
Master · Tutor for 5 years
Answer
Earnings per share ratio
Explanation
## Step 1: We first understand the definitions of all the measurement factors provided:- Gearing Ratio measures how much of a company's operations are funded by debt compared to equity.- Current Ratio measures a company's ability to meet short-term debt obligations.- Earnings Per Share Ratio gives information about profit allocated on a per-share basis.- Inventory Turnover Period Ratio indicates how quickly a company is selling its inventory.- Interest cover Ratio measures how easily a company can pay its interests on outstanding debt.## Step 2: Among all these definitions, we find that the "Earnings per Share Ratio" deals directly with the profits related to each share owned by the investors.## Step 3: It can therefore be deduced that the Earnings per Share Ratio flip\hspace{2pt} t(m }{- [ t(dew ht], [/4 deeps cifica Specifically loud be the US return investors' return elir measace the most fundamental way, compared to the others which are more inclined towards the company’s financial health.