Question

Match List - I with List - II

List - I	List - II
(A) Current Ratio	(II) Liquidity Ratios
(B) Inventory Turnover Ratio	(IV) Activity Ratios
(C) Return on Investment	(III) Profitability Ratios
(D) Proprietary Ratio	(I) Solvency Ratios

Choose the correct answer from the options given above:

• A. (A)-(II), (B)-(IV), (C)-(I), (D)-(III)
• B. (A)-(I), (B)-(II), (C)-(III), (D)-(IV)
• C. (A)-(II), (B)-(IV), (C)-(III), (D)-(I)
• D. (A)-(IV), (B)-(I), (C)-(III), (D)-(II)

Hint:

"Understand various activities so that when there is any type of ratio, its relation can be understood correctly."

Answer 1

The Correct Option is C

Understanding Financial Ratios and Their Classifications:
\begin{itemize} \item
Current Ratio (A): Liquidity ratio that measures a company's ability to cover its short-term obligations with its short-term assets. \item
Inventory Turnover Ratio (B): Activity ratio that shows how effectively a company is using its inventory to generate sales. \item
Return on Investment (C): Profitability ratio that measures the gain or loss generated on an investment relative to its cost. \item
Proprietary Ratio (D): Solvency ratio that shows the proportion of a company’s equity to its total assets, indicating long-term financial stability. \end{itemize} Thus, the correct matching is (A)-(II), (B)-(IV), (C)-(III), (D)-(I).