Accountancy Part BAccounting Ratios

The ratios calculated to measure the short term commitments of busine…

The ratios calculated to measure the short term commitments of business is

Answer & explanation

Correct answer: option 1

The correct answer is Option (1) → Liquidity Ratio

NCERT (2026-27 edition):
Liquidity Ratios – “Liquidity ratios are calculated to measure the short-term solvency of the business, i.e. the firm’s ability to meet its current obligations. These are analysed by looking at the amounts of current assets and current liabilities in the balance sheet. The two ratios included in this category are current ratio and liquidity ratio.”