Match List – I with List – II.
|
List – I |
List – II |
|
(A) Activity Ratios |
(I) Ratios which help in the analysis of profit |
|
(B) Profitability Ratios |
(II) Ratios which determine the ability of a |
|
(C) Solvency Ratios |
(III) Ratios that are calculated for measuring the efficiency |
|
(D) Liquidity Ratios |
(IV) Ratios that determine the ability to meet its |
Choose the correct answer from the options given below :
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (A)-(III), (B)-(I), (C)-(IV), (D)-(II)
In the functional classification, ratios are grouped by the purpose for which they are worked out.
(A) Activity Ratios — this matches (III) Ratios that are calculated for measuring the efficiency of operations of business based on effective utilisation of resources. They show how fast assets are turned into sales, so they are also called efficiency ratios.
(B) Profitability Ratios — this matches (I) Ratios which help in the analysis of profit in relation to revenue from operations. Gross profit ratio and net profit ratio are examples.
(C) Solvency Ratios — this matches (IV) Ratios that determine the ability to meet its contractual obligations towards stakeholders. They are long-term in nature, such as the debt-equity ratio.
(D) Liquidity Ratios — this matches (II) Ratios which determine the ability of a business to meet its short term commitments. The current ratio and the liquid ratio belong here.
NCERT (2026-27 edition):
|
