Financial Statements

Ratios

Easy

Financial Statements

The higher current ratio is not a symbol of strength of a firm, rather it is the sign of:

Better Solvency position

Under utilization of resources

Efficiency

Not able to pay dues on time

✅ Correct Option: 2

A very high current ratio usually means excessive stock, idle cash or slow moving debtors. Funds are locked up in current assets instead of being deployed productively, which lowers profitability. So an unusually high ratio signals under utilisation of resources rather than genuine financial strength.

2023: 20 June Shift 2

Match List I with List II

LIST I	LIST II
A. Operating Profit Ratio	I. Solvency Ratios
B. Working Capital Turnover Ratio	II. Liquidity Ratios
C. Debt-Equity Ratio	III. Activity Ratios
D. Quick Ratio	IV. Profitability Ratios

Choose the correct answer from the options given below:

2025: 16 May Shift 1

Which of the following is not a profitability ratio?

2025: 15 May Shift 2

On the basis of information given below the closing Inventory will be

Opening inventory 20,000

average inventory 40,000

2024

Calculate Trade Receivables Turnover Ratio.

2025: 4 June Shift 2

Liquid Ratio is also known as:

(A) Current Ratio

(B) Quick Ratio

(D) Working Capital Ratio

Choose the correct answer from the options given below:

2025: 14 May Shift 2

P/E Ratio (Price Earning Ratio)

The higher current ratio is not a symbol of strength of a firm, rather it is the sign of:

Solution

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