Question : The main object of every business concern is to earn profits. A business must be able to earn adequate profits in relation to the capital invested in it. The efficiency and the success of a business can be measured with the help of_____________
Option 1: Activity ratio
Option 2: Liquidity ratio
Option 3: Solvency ratio
Option 4: Profitability ratio
Correct Answer: Profitability ratio
Solution :
Answer =
Profitability ratio
Business efficiency is measured the Profitability. "Profitability" refers to the
Financial Performance of the Business.
Profitability ratios assess a business's ability to generate profits relative to its investments and operations. They provide insights into the efficiency and success of the business by evaluating how effectively it utilizes resources to generate earnings and returns for its stakeholders.
Hence, the correct option is 4.
