Match List - I with List - II
| List - I | List - II | ||
|---|---|---|---|
| (a) | Working Capital Turnover Ratio | (i) | \( \displaystyle\frac{\text{Quick Assets}}{\text{Current liabilities}} \) |
| (b) | Acid Test Ratio | (ii) | \( \displaystyle\frac{\text{Operating Profit}}{\text{Rev. from operations}}\times100 \) |
| (c) | Operating Profit Ratio | (iii) | \( \displaystyle\frac{\text{Revenue from operation}}{\text{Working capital}} \) |
| (d) | Trade Payables Turnover Ratio | (iv) | \( \displaystyle\frac{\text{Net Credit Revenue from operation}}{\text{Average Trade payables}} \) |
Choose the correct answer from the options given below :
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → (a) - (iii), (b) - (i), (c) - (ii), (d) - (iv)
Each ratio compares two figures, and its name tells what they are. A turnover ratio divides a flow (revenue or purchases) by the asset or liability it moves through.
| List-I | List-II | Reason |
|---|---|---|
| (a) Working Capital Turnover Ratio | (iii) \( \displaystyle\frac{\text{Revenue from operation}}{\text{Working capital}} \) | It shows how many times the working capital is turned into revenue in a year. |
| (b) Acid Test Ratio | (i) \( \displaystyle\frac{\text{Quick Assets}}{\text{Current liabilities}} \) | Acid test ratio is another name for the quick (liquid) ratio: quick assets compared with current liabilities. |
| (c) Operating Profit Ratio | (ii) \( \displaystyle\frac{\text{Operating Profit}}{\text{Rev. from operations}}\times100 \) | It is operating profit as a percentage of revenue from operations. |
| (d) Trade Payables Turnover Ratio | (iv) \( \displaystyle\frac{\text{Net Credit Revenue from operation}}{\text{Average Trade payables}} \) | Trade payables arise from credit purchases, so the ratio is net credit purchases ÷ average trade payables. Item (iv) is the only one with average trade payables. |
Note: There seems to be a misprint in item (iv) of List-II. Its top line reads “Net Credit Revenue from operation”, but for the trade payables turnover ratio it should read “Net Credit Purchases”. The matching does not change, because (iv) is the only trade payables formula in the list.
NCERT (2026-27 edition):
Quick or Liquid Ratio
Operating Profit Ratio
Trade Payable Turnover Ratio
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