Question

Profitability ratio is generally shown in

• A. Simple ratio
• B. Percentage
• C. Times
• D. None of these

Hint:

Gross Profit Ratio and Net Profit Ratio are always expressed in percentage.

Answer 1

The Correct Option is B

Step 1: Understanding profitability ratios.
Profitability ratios measure the earning capacity of a business relative to sales, assets, or equity.
Step 2: Presentation.
These ratios are usually expressed as percentages because they show profitability relative to some base (like sales or capital).
Step 3: Option analysis.
- (A) Simple ratio: Wrong, not common for profitability ratios.
- (B) Percentage: Correct, e.g., Net Profit Ratio, Gross Profit Ratio.
- (C) Times: Wrong, used in activity ratios like inventory turnover.
- (D) None of these: Wrong.
Step 4: Conclusion.
Profitability ratios are generally shown in percentage form.