Final answer:
The correct answer is option 1. The profitability of the owner's investment is assessed using the Return on Investment (ROI), which compares the gain from an investment to its original cost. ROI is similar to EROEI in that both measure the efficiency and yield of investments, but ROI focuses on financial returns rather than energy.
Step-by-step explanation:
The ratio used to find the profitability of the owner's investment is the Return on Investment (ROI). ROI is a key performance metric that compares the gain from an investment relative to its cost. Essentially, it evaluates how effective an investor's capital has been in generating profit. For instance, if an investment results in a substantial increase in a company's value or produces significant earnings, the ROI would be high, indicating a profitable outcome for the shareholder.
Comparing ROI to Energy Returned on Energy Invested (EROEI), which measures the profitability of an energy source in terms of energy output relative to energy input, we see that both ratios aim to analyze the yield of an investment. A higher EROEI indicates more energy is generated than consumed, similar to how a higher ROI signifies a greater financial return on an investment than the amount initially invested.
The other ratios mentioned, such as the Debt-to-Equity Ratio, Current Ratio, and Gross Profit Margin, serve different purposes in financial analysis. For example, the Debt-to-Equity Ratio measures financial leverage, the Current Ratio assesses short-term liquidity, and the Gross Profit Margin examines sales and production efficiency, none of which are directly related to the profitability of the owner's investment.