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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

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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

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

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TrevorMaster · Tutor for 5 years

Answer

Earnings per share ratio

Explain

## Step 1: <br />We first understand the definitions of all the measurement factors provided:<br />- Gearing Ratio measures how much of a company's operations are funded by debt compared to equity.<br />- Current Ratio measures a company's ability to meet short-term debt obligations.<br />- Earnings Per Share Ratio gives information about profit allocated on a per-share basis.<br />- Inventory Turnover Period Ratio indicates how quickly a company is selling its inventory.<br />- Interest cover Ratio measures how easily a company can pay its interests on outstanding debt.<br /><br />## Step 2: <br />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.<br /><br />## Step 3: <br />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.
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