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Match the LIST-I with LIST-II

LIST-ILIST-II
A.Liquidity Ratio(s)I.Measure long term financial stability
B.Solvency Ratio(s)II.Measure to analyse the earning capacity
C.Profitability Ratio(s)III.Measure ability to pay short-term obligation
D.Activity Ratio (s)IV.Measure utilisation of resources

Choose the correct answer from the options given below:

Solution

✅ Correct Option: 4

Liquidity ratios test the ability to meet short-term obligations (III). Solvency ratios test long-term financial stability and the ability to repay long-term debt (I). Profitability ratios measure earning capacity (II). Activity or turnover ratios measure how efficiently resources are utilised (IV).

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