Match List-I with List-II based on standard financial ratio classifications:List-IList-II(A) Liquidity Ratios(I) Debt to Capital Employed Ratio(B) Solvency Ratios(II) Net profit ratio(C) Activity Ratios(III) Current Ratio(D) Profitability Ratios(IV) Working capital Turnover RatioChoose the correct answer from the options given below:
- A(A) - (III), (B) - (I), (C) - (IV), (D) - (II)
- B(A) - (I), (B) - (III), (C) - (II), (D) - (IV)
- C(A) - (I), (B) - (II), (C) - (IV), (D) - (III)
- D(A) - (III), (B) - (IV), (C) - (I), (D) - (II)
Solution & Step-by-step Explanation
Evaluating the categories of financial ratios:(A) Liquidity Ratios: Measure short-term obligations. Example: Current Ratio (III)(B) Solvency Ratios: Measure long-term debt-paying capacity. Example: Debt to Capital Employed Ratio (I)(C) Activity Ratios: Measure efficiency of asset usage. Example: Working Capital Turnover Ratio (IV)(D) Profitability Ratios: Measure financial returns. Example: Net Profit Ratio (II)This gives us the mapping: (A) - (III), (B) - (I), (C) - (IV), (D) - (II).