What are three profitability ratios?Multiple select question.return on salesacid-testbasic earnings per sharecurrent ratioreturn on equity

To identify the profitability ratios from the given options, let's first briefly define each term:

1. Return on Sales (ROS): This ratio measures how efficiently a company can convert its sales into profits. It is calculated as Net Income divided by Sales Revenue.

2. Acid-Test Ratio: Also known as the quick ratio, this is a liquidity measure and not a profitability ratio. It assesses a company's ability to meet short-term obligations without relying on inventory.

3. Basic Earnings Per Share (EPS): This ratio is a measure of a company's profitability that indicates how much profit a company generates for each share of its stock. It is calculated as Net Income divided by the number of outstanding shares.

4. Current Ratio: This is another liquidity ratio that indicates a company’s ability to pay its short-term obligations with its current assets. It is not a measure of profitability.

5. Return on Equity (ROE): This ratio measures the profitability of a company in relation to shareholders' equity. It is calculated as Net Income divided by Shareholders' Equity, showing how effectively management is using a company’s assets to create profits.

Conclusion

Based on these definitions, the three profitability ratios from the options provided are:

1. Return on Sales (ROS)
2. Basic Earnings Per Share (EPS)
3. Return on Equity (ROE)

The Acid-Test Ratio and Current Ratio are not profitability ratios; they are liquidity ratios.