Question

Match List-I with List-II:

\[\begin{array}{|c|c|} \hline \text{List-I (Accounting ratio)} & \text{List-II (Type of ratio)} \\ \hline \text{(A) Current ratio} & \text{(I) Liquidity ratios} \\ \hline \text{(B) Stock turnover ratio} & \text{(II) Activity ratios} \\ \hline \text{(C) Debt Equity ratio} & \text{(III) Solvency ratios} \\ \hline \text{(D) Operating ratio} & \text{(IV) Profitability ratios} \\ \hline \end{array}\]

Choose the correct answer from the options given below:

• (A) - (I), (B) - (II), (C) - (III), (D) - (IV)
• (A) - (I), (B) - (III), (C) - (II), (D) - (IV)
• (A) - (I), (B) - (II), (C) - (IV), (D) - (III)
• (A) - (III), (B) - (IV), (C) - (I), (D) - (II)

Hint:

Always classify ratios into four broad groups: Liquidity, Activity, Solvency, and Profitability.

Answer 1

The Correct Option is A

Step 1: Understanding the ratios.
(A) Current Ratio → Measures liquidity position → Liquidity Ratio → Correct.
(B) Stock Turnover Ratio → Measures efficiency of inventory management → Activity Ratio → Correct.
(C) Debt-Equity Ratio → Tests long-term financial stability → Solvency Ratio → Correct.
(D) Operating Ratio → Measures profitability from operations → Profitability Ratio → Correct.

Step 2: Conclusion.
The correct matching is: (A) - (I), (B) - (II), (C) - (III), (D) - (IV).

Final Answer: \[ \boxed{(A) - (I), \, (B) - (II), \, (C) - (III), \, (D) - (IV)} \]