Financial Statements

Ratios

Easy

Identify the ratio which is not computed for evaluating solvency of the business.

Debt-Equity Ratio

Proprietary Ratio

Operating Ratio

Interest Coverage Ratio

✅ Correct Option: 3

Solvency ratios measure the long-term financial position of a business. Debt-Equity, Proprietary, and Interest Coverage Ratios are all solvency ratios. Operating Ratio measures operating efficiency and profitability, not solvency, so it is not computed for evaluating solvency.

2025: 22 May Shift 2

The ideal quick ratio is

2026: 11 May Shift 1

ABC Ltd has an average inventory of Rs. 20,000 at cost. If the Inventory Turnover Ratio is 8 times and the firm sells goods at a gross profit of 20% on sales. Calculate the gross profit of ABC Ltd.

2025: 14 May Shift 2

Return on Shareholders' Funds

2025: 13 May Shift 2

Trade Receivable Turnover Ratio is-

2025: 14 May Shift 1

_________ are especially interested in the average payment period, since it provides them with a sense of the bill-paying patterns of the firm.

2025: 27 May Shift 2

Calculate 'Liquid Ratio' from the following information:

Current liabilities	Rs. 50,000
Current assets	Rs. 80,000
Inventories	Rs. 20,000
Advance tax	Rs. 5,000
Prepaid expenses	Rs. 5,000

Identify the ratio which is not computed for evaluating solvency of the business.

Solution

Related questions:

Keyboard Shortcuts

CUET Accountancy Past Year Questions (Topic-Wise)