Match the following.
| LIST 1 | LIST 2 |
| (A) Current Ratio | (I) Solvency Ratios |
| (B) Inventory Turnover Ratio | (II) Liquidity Ratios |
| (C) Return on Investment | (III) Profitability Ratios |
| (D) Proprietory Ratio | (IV) Activity Ratios |
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → (A)-(II), (B)-(IV), (C)-(III), (D)-(I)
Ratios are grouped by the purpose they serve:
(A) Current Ratio — this matches (II) Liquidity Ratios. It tests the ability to meet short-term obligations.
(B) Inventory Turnover Ratio — this matches (IV) Activity Ratios. It measures how fast inventory is turned into revenue.
(C) Return on Investment — this matches (III) Profitability Ratios. It relates profit to the capital employed.
(D) Proprietory Ratio — this matches (I) Solvency Ratios. It shows how far assets are financed by owners’ funds, a long-term test.
NCERT (2026-27 edition): NCERT (2026-27 edition):
NCERT (2026-27 edition):
NCERT (2026-27 edition):
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