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Match the items of List-I with those of List-II and indicate the correct code : List – I List – II a.…

In financial ratio analysis: the Acid Test (Quick) Ratio measures short-term Liquidity (iii); the Debt Service Coverage Ratio (DSCR) assesses cash-flow…

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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. Debt Service Coverage Ratio

ii. Activity analysis c. Debt Equity Ratio

iii. Liquidity analysis

d. Stock Turnover Ratio

iv. Long-term solvency analysis

Select one answer
Answer and explanation

Correct answer D

In financial ratio analysis: the Acid Test (Quick) Ratio measures short-term Liquidity (iii); the Debt Service Coverage Ratio (DSCR) assesses cash-flow Profitability/earnings adequacy to service debt (i); the Debt-Equity Ratio evaluates Long-term Solvency and capital structure leverage (iv); and the Stock (Inventory) Turnover Ratio measures operational Activity/efficiency (ii).

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