Which of the following is an example of a profitability ratio?

A profitability ratio measures a company's ability to generate profit relative to its revenue, assets, or equity. Return on Equity (ROE) is a prime example of such a ratio, as it evaluates how effectively a company uses shareholders' equity to generate profit. It is calculated by dividing net income by shareholder equity, demonstrating the return that investors can expect on their investment in the company.

This ratio is pivotal for stakeholders because it reflects a company's efficiency at converting equity into profits, thereby indicating the financial health and operational performance of the business. High ROE values are typically seen as favorable and suggest effective management and a potentially profitable investment.

In contrast, the other choices represent different categories of ratios. For instance, the current ratio and quick ratio are liquidity ratios, which focus on a company's ability to cover its short-term liabilities with its short-term assets. The debt ratio, on the other hand, is a solvency ratio that measures the proportion of a company’s assets that are financed by debt, reflecting financial leverage rather than profitability.