Question : The ratios are primarily measures of the earning capacity of the business.
Option 1: Activity
Option 2: Debt
Option 3: Profitability
Option 4: Liquidity
Answer (1)
17th Jan, 2024
Correct Answer: Profitability
Solution : The ability of an entity to generate profits can be assessed using profitability ratios like net profit ratio, gross profit ratio, return on capital used, etc.
Hence the correct answer is option 3.
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