Provision for Doubtful Debts is deducted from Trade Receivables while computing which ratio?

Both options 1 and 3

The provision for doubtful debts is deducted from trade receivables while computing liquidity ratios because it represents an estimation of the portion of trade receivables that are expected to be un collectable. Liquidity ratios are financial metrics used to assess a company's ability to meet its short-term obligations, and they provide insight into its liquidity or ability to convert assets into cash quickly. The provision for doubtful debts is created by companies to account for the possibility that some customers may default on their credit obligations or become unable to pay their outstanding invoices. It is a conservative accounting practice to recognize potential bad debts and reduce the trade receivables' value accordingly.