Match the items of List-I with those of List-II and indicate the correct code: List-IList-II (a) Acid…
The acid test ratio measures liquidity, return on investment measures profitability, and the debt equity ratio measures long-term solvency. Inventory turnover measures…
Choose your answer
Match the items of List-I with those of List-II and indicate the correct code:
| List-I | List-II |
|---|---|
| (a) Acid Test Ratio | (i) Profitability analysis |
| (b) Return on Investment | (ii) Activity analysis |
| (c) Debt Equity Ratio | (iii) Liquidity analysis |
| (d) Inventory Turnover Ratio | (iv) Long-term solvency analysis |
Answer and explanation
Correct answer D
The acid test ratio measures liquidity, return on investment measures profitability, and the debt equity ratio measures long-term solvency. Inventory turnover measures activity by relating inventory holdings to the flow of goods sold.
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West Bengal SET (WB SET)