Match the following: Type of Ratio Example of Ratio a. Market prospect Ratio i. Return on capital…
The P/E ratio measures market prospects, while return on capital employed measures profitability. Inventory turnover measures efficiency in using inventory, and times…
Choose your answer
Match the following:
| Type of Ratio | Example of Ratio |
| a. Market prospect Ratio | i. Return on capital employed ratio |
| b. Profitability Ratio | ii. Times interest earned ratio |
| c. Efficiency Ratio | iii. Inventory Turnover ratio |
| d. Coverage Ratio | iv. P/E ratio |
Answer and explanation
Correct answer B
The P/E ratio measures market prospects, while return on capital employed measures profitability. Inventory turnover measures efficiency in using inventory, and times interest earned measures interest coverage. The matching is therefore a-iv, b-i, c-iii, d-ii.
Practice for these exams
-
Telangana SET (TG SET)