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Match the significance of ratios List-I List-II a) Liquidity Ratio i) How efficiently company utilizes…

Liquidity ratios assess the ability to meet short-term obligations, and profitability ratios assess profit generation. Turnover ratios measure asset-use efficiency in…

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Match the significance of ratios

List-IList-II
a) Liquidity Ratioi) How efficiently company utilizes its assets to generate sales
b) Profitability Ratioii) Assess the level of financial risk by analysing the use of debt in the capital structure
c) Turnover Ratioiii) How effectively a company generates profit from its operations
d) Leverage Ratioiv) Ability to meet short term obligations
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Answer and explanation

Correct answer D

Liquidity ratios assess the ability to meet short-term obligations, and profitability ratios assess profit generation. Turnover ratios measure asset-use efficiency in generating sales, while leverage ratios assess the debt-related financial risk of the capital structure.

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  • Karnataka SET (KSET)

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