Financial Ratio Analysis Matching

The question asks to match financial ratios (List-I) with their corresponding analysis types (List-II). Let's analyze each item:

Matching Financial Ratios to Analysis Types

• a. Acid Test Ratio: This ratio assesses a company's ability to meet its short-term obligations using its most liquid assets (excluding inventory). It is a key indicator for Liquidity analysis. Thus, a matches with iii.
• b. Debt Service Coverage Ratio (DSCR): This ratio measures the cash flow available to pay current debt obligations. It reflects the company's ability to generate sufficient earnings or cash to service its debt. In the context of the options provided, it is best aligned with Profitability analysis, evaluating if profits adequately cover debt service. Thus, b matches with i.
• c. Debt Equity Ratio: This ratio compares a company's total debt to its shareholder equity, indicating its financial leverage. It is crucial for assessing Long-term solvency analysis. Thus, c matches with iv.
• d. Stock Turnover Ratio: This ratio measures how efficiently a company manages its inventory by calculating how many times inventory is sold and replaced over a period. It is a fundamental measure in Activity analysis. Thus, d matches with ii.

Correct Code Determination

Combining the matches:

• a - iii
• b - i
• c - iv
• d - ii

This corresponds to the code a-iii, b-i, c-iv, d-ii.