Match List-I with List-IIList-I (Ratio Group)List-II (Specific Ratio Example)(A). Liquidity Ratio(I). Receivable Turnover Ratio(B). Solvency Ratio(II). Quick Ratio(C). Activity (or Turnover) Ratio(III). Earning Per Share Ratio(D). Profitability Ratio(IV). Debt to Equity RatioChoose the correct answer from the options given below:
- A(A) - (III), (B) - (IV), (C) - (I), (D) - (II)
- B(A) - (I), (B) - (II), (C) - (IV), (D) - (III)
- C(A) - (I), (B) - (III), (C) - (II), (D) - (IV)
- D(A) - (II), (B) - (IV), (C) - (I), (D) - (III)
Solution & Step-by-step Explanation
Let's correctly pair each accounting ratio category:Liquidity Ratio (A): Pairs with Quick Ratio (II) as it evaluates immediate short-term solvency.Solvency Ratio (B): Pairs with Debt to Equity Ratio (IV) as it evaluates long-term leverage and capability.Activity / Turnover Ratio (C): Pairs with Receivable Turnover Ratio (I) as it evaluates operational utilization metrics.Profitability Ratio (D): Pairs with Earning Per Share Ratio (III) as it tracks returns generated on corporate metrics.This yields the matching configuration: (A)-(II), (B)-(IV), (C)-(I), (D)-(III).