Question : Which ratio helps to know whether the profits of a firm are increasing or decreasing and if decreasing, the cause of their decrease?
Option 1: Turnover ratio
Option 2: Solvency Ratio
Option 3: Profitability Ratio
Option 4: Liquidity Ratio
Correct Answer: Profitability Ratio
Solution : One type of accounting ratio which helps in assessing the financial success of a company at the end of an accounting period is the profitability ratio. The ability of a business to turn a profit from its operations can be verified by profitability ratios. Hence, the correct option is 3.
Question : To know how efficiently the working capital and inventory are being used to obtain revenue from the operation which ratio helps to know this?
Option 1: Activity Ratio
Option 2: Liquidity Ratio
Option 3: Solvency Ratio
Option 4: Profitability Ratio
Question : The working capital ratio is part of __________ ratio?
Option 1: Solvency Ratio
Option 2: Profitability Ratio
Option 3: Activity Ratio
Question : Which of the following ratio is the "Current Ratio"?
Question : The liquidity ratio is also called________?
Option 1: Long-term solvency Ratio
Option 2: Medium-term solvency Ratio
Option 3: Short-term solvency Ratio
Option 4: All of the above
Question : Which type of ratio states EBIT/Total assets?
Option 1: Liquidity ratio
Option 2: Return on total assets ratio
Option 3: Solvency ratio
Option 4: Turnover ratio
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