Match List I with List II
| List I | List II |
| A. Liquidity Ratio | I. Proprietary Ratio |
| B. Solvency Ratio | II. Current Ratio |
| C. Activity Ratio | III Earning per Share |
| D. Profitability ratio | IV. Current assets turnover ratio |
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → A-II, B-I, C-IV, D - III
A. Liquidity Ratio — this matches II. Current Ratio. Liquidity ratios test short-term solvency; the current ratio compares current assets with current liabilities.
B. Solvency Ratio — this matches I. Proprietary Ratio. Solvency ratios test long-term solvency; the proprietary ratio shows how much of the total assets is financed by the owners’ funds.
C. Activity Ratio — this matches IV. Current assets turnover ratio. Activity (turnover) ratios show how efficiently assets are used to generate revenue from operations.
D. Profitability ratio — this matches III. Earning per Share. Earning per share measures the profit earned for each equity share and so is a profitability ratio.
NCERT (2026-27 edition):
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