Answer (A) is correct . Earnings per share is a profitability ratio. It measures the level of profitability of the firm on a per-share basis.
Answer (B) is incorrect because Activity ratios measure management’s efficiency in using specific resources.
Answer (C) is incorrect because Liquidity ratios indicate the ability of a company to meet short-term obligations.
Answer (D) is incorrect because Leverage or equity ratios concern the relationship of debt to equity and measure the impact of the debt on profitability and risk.
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