Match the items of List – I with the items of List – II: List – I List – II (a) Leverage Ratio (i)…
Leverage ratios examine the relationship between debt and equity, while liquidity ratios assess short-term solvency. Turnover ratios indicate the efficiency of asset…
Choose your answer
Match the items of List – I with the items of List – II:
| List – I | List – II |
| (a) Leverage Ratio | (i) Short-term solvency |
| (b) Liquidity Ratio | (ii) Earning capacity |
| (c) Turnover Ratio | (iii) Relationship between debt and equity |
| (d) Profitability Ratio | (iv) Efficiency of Asset Management |
Answer and explanation
Correct answer D
Leverage ratios examine the relationship between debt and equity, while liquidity ratios assess short-term solvency. Turnover ratios indicate the efficiency of asset management, and profitability ratios measure earning capacity. The matches are a-iii, b-i, c-iv and d-ii.
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Andhra Pradesh SET (APSET)