Match List I with List II regarding accounting ratios and their descriptions:List I (Ratios)List II (Descriptions)A. Debt-Equity RatioI. Primarily indicates the rate of external funds in financing assets.B. Total assets to Debt ratioII. Higher proportion provides security to creditors.C. Proprietary ratioIII. It reveals the efficiency of business in utilization of funds.D. Return on InvestmentIV. It measures the degree of indebtedness of an enterprise.Choose the correct answer from the options given below:
- AA-I, B-IV, C-III, D-II
- BA-IV, B-I, C-II, D-III
- CA-IV, B-II, C-III, D-I
- DA-IV, B-III, C-II, D-I
Solution & Step-by-step Explanation
Let's match each accounting ratio with its direct operational meaning:A. Debt-Equity Ratio: Measures the long-term relative proportions of debt and equity, indicating the overall degree of indebtedness IV.B. Total Assets to Debt Ratio: Indicates the extent to which assets are financed by external debt obligations I.C. Proprietary Ratio: Indicates the security cover available to creditors (a higher safety cushion means more asset safety) II.D. Return on Investment: Reflects structural overall profitability efficiency in funds utilization III.Matches: A-IV, B-I, C-II, D-III.