Question

Key financial ratios that could help analysts measure Whole Foods' profitability do not include

a) operating profit margin.
b) return on capital employed.
c) net return on assets.
d) inventory turnover.
e) return on stockholders' equity.

Answer 1

Inventory turnover (option D) is the financial ratio that does not measure Whole Foods' profitability, as it pertains to inventory management efficiency rather than profit generation.

Step-by-step explanation:

The question examines which key financial ratios do not help in measuring Whole Foods' profitability. Key financial ratios for analyzing a company's profitability typically include operating profit margin, return on capital employed (ROCE), net return on assets (ROA), and return on stockholders' equity (ROE). However, inventory turnover ratio, which measures how many times a company's inventory is sold and replaced over a period, is more related to efficiency and inventory management than profitability. Hence, inventory turnover is the ratio that does not belong in the set of ratios analysts use to measure Whole Foods' profitability.