Match list I with list II and choose the correct answer from the opti…

Match list I with list II and choose the correct answer from the options given below:

LIST 1	LIST 2
A) Dividend per share	I) Solvency ratio
B) Proprietary ratio	II) Activity ratio
C) Quick ratio	III) Profitability ratio
D) Inventory turnover ratio	IV) Liquidity ratio

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → A-III, B-I, C-IV, D-II

Ratios are grouped by what they measure: liquidity, solvency, activity (turnover) and profitability.

(A) Dividend per share — this matches (III) Profitability ratio. It shows the earnings distributed per share.

(B) Proprietary ratio — this matches (I) Solvency ratio. It measures long-term safety through owners’ funds to total assets.

(C) Quick ratio — this matches (IV) Liquidity ratio. The book calls it the quick, liquid or acid test ratio.

(D) Inventory turnover ratio — this matches (II) Activity ratio. Turnover ratios measure activity levels.

NCERT (2026-27 edition):
Summary – “… There are many types of ratios, viz., liquidity, solvency, activity and profitability ratios. The liquidity ratios include current ratio and acid test ratio. Solvency ratios are calculated to determine the ability of the business to service its debt in the long run instead of in the short run. They include debt equity ratio, total assets to debt ratio, proprietary ratio and interest coverage ratio.”

NCERT (2026-27 edition):
Summary – “… The turnover ratios basically exhibit the activity levels characterised by the capacity of the business to make more sales or turnover and include Inventory Turnover, Trade Receivables Turnover, Trade Payables Turnover, Working Capital Turnover, Fixed Assets Turnover and Current assets Turnover.”

NCERT (2026-27 edition):
Summary – “… Profitability ratios are calculated to analyse the earning capacity of the business which is the outcome of utilisation of resources employed in the business. The ratios include Gross Profit ratio, Operating ratio, Net Profit Ratio, Return on investment (Capital employed), Earnings per Share, Book Value per Share, Dividend per Share and Price/Earning ratio.”

NCERT (2026-27 edition):
Quick or Liquid Ratio

Extract from the NCERT textbook