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The ratios which reveal the final result of the managerial policies and performance is _______

  • The ratios which reveal the final result of the managerial policies and performance is profitability ratios.
  • Profitability ratios show the combined effects of liquidity, asset management, and debt management policies on operating results.
  • Profitability ratios are the ultimate test of management's effectiveness. They indicate how well an organization operated during a year.
  • They are a culmination of many policies and decisions made by management during the current year as well as in previous years.
  • They include the net profit margin (also called the profit margin on sales), the basic earning power (BEP) ratio, the return on total assets (ROA), and the return on common equity (ROE).