Question : With respect to the liquidity Ratio, which of the following statements is incorrect?

Option 1: “Liquidity” refers to the ability of the firm to meet its current liabilities.

Option 2: Liquidity is the ease with which assets may be converted into cash without loss.

Option 3: The liquidity ratios are also called 'long-term Solvency Ratios'.

Option 4: Short-term trade payables of the firm are primarily interested in the liquidity ratios of the firm.

Question : With respect to the liquidity Ratio, which of the following statements is incorrect?

Option 1: “Liquidity” refers to the ability of the firm to meet its current liabilities.

Option 2: Liquidity is the ease with which assets may be converted into cash without loss.

Option 3: The liquidity ratios are also called 'long-term Solvency Ratios'.

Option 4: Short-term trade payables of the firm are primarily interested in the liquidity ratios of the firm.

Question : Which of the following is the correct formula for "Current Ratio"?

Option 1: Liquid Assets/Current Liabilities

Option 2: Current Assets/Current Liabilities

Option 3: Fixed Assets/Current Assets

Option 4: Liquid Assets/Current Assets

Question : To know the return on investment, by capital employed we mean:

Option 1: Current Asset - Current Liabilities

Option 2: Gross Block

Option 3: Fixed Assets + Current Assets - Current Liabilities

Option 4: Net Fixed Assets

Question : Which of the following statements is not true?

Option 1: The current ratio establishes a relationship between Current Assets and Current Liabilities.

Option 2: Current Ratio $=\frac{\text { Current Assets }}{\text { Current Liabilities }}$

Option 3: It measures the ability of the firm to meet its current liabilities within 12 months from the date of the Balance Sheet or within the period of the operating cycle.

Option 4: The current Ratio of 1:1 is considered an ideal ratio