Which ratio primarily relates to the income statement, specifically focusing on revenues and expenses?

Profitability ratios primarily focus on the relationship between revenues and expenses, providing insights into a company's ability to generate profit relative to its sales and operational costs. These ratios, such as gross profit margin, operating margin, and net profit margin, evaluate how well a company converts its revenues into profits by highlighting how much profit is retained after covering all expenses.

In contrast, liquidity ratios assess a company's ability to meet short-term obligations, focusing on current assets and liabilities rather than profitability. Activity ratios measure how efficiently a company utilizes its assets to generate revenue, while capital structure ratios analyze the financial leverage of a company and the proportion of debt versus equity financing. Therefore, the emphasis on revenues and expenses makes profitability ratios the most relevant in this context.