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easyMCQCUET Accountancy 2022 20 Aug Shift 22026Accountancy
1 mark

Earning Capacity of a Company is measured by:

  1. A
    Working Capital Ratio
  2. B
    Profitability Ratio
  3. C
    Solvency Ratio
  4. D
    Liquidity Ratio

Solution & Step-by-step Explanation

Profitability ratios are designed to measure a company's ability to generate earnings (profit) relative to its sales, operating costs, and balance sheet assets.

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Earning Capacity of a Company is measured by:
A
Working Capital Ratio
B
Profitability Ratio
C
Solvency Ratio
D
Liquidity Ratio

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