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
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.
Question : The following groups of ratios primarily measure risk:
Question : Where is the Debt Equity Ratio covered?
Question : Which ratios provide information critical to the firm's long-term operation?
Question : ---------------------ratios measure how well the facilities at the disposal of the concern are being utilized.
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile