Match List I with List II
| List I | List II |
| A. Liquidity Ratio | I. Proprietary Ratio |
| B. Solvency Ratio | II. Fixed Asset Turnover Ratio |
| C. Activity Ratio | III. Earning per share |
| D. Profitability Ratio | IV. Quick Ratio |
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → A-IV, B-I, C-II, D-III
Ratios are grouped by what they measure: short-term paying ability, long-term solvency, speed of use of assets, or profit earned.
(A) Liquidity Ratio — this matches (IV) Quick Ratio. The quick (acid test) ratio tests the ability to pay current liabilities from quick assets.
(B) Solvency Ratio — this matches (I) Proprietary Ratio. It shows how much of the total assets is financed by the owners, a test of long-term solvency.
(C) Activity Ratio — this matches (II) Fixed Asset Turnover Ratio. It shows how many times fixed assets are turned into revenue from operations.
(D) Profitability Ratio — this matches (III) Earning per share. It measures the profit earned for each equity share.
NCERT (2026-27 edition):
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