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…
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. Debt Service Coverage Ratio
ii. Activity analysis c. Debt Equity Ratio
iii. Liquidity analysis
d. Stock Turnover Ratio
iv. Long-term solvency analysis
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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UGC NET Commerce