Which ratios are calculated for measuring the efficiency of operation of business based on effective utilisation of resources?
Activity ratios
The correct answer is option 3. Activity ratios are calculated to measure the efficiency of the operation of a business by assessing how effectively the resources are being utilized in generating revenue. These ratios include inventory turnover, receivables turnover, and asset turnover.
Similar Questions
Which of the following ratio is also termed as leverage ratio?
Which of the following formulae is INCORRECT?
Interest Coverage Ratio and proprietary ratio comes under:
Important Questions from Ratio analysis
A company sold 20% of the goods on cash basis and balance on credit basis. Debtors are allowed \(1\frac{1}{2}\) months’ credit and their balances as on 31st March, 2023 is Rs. 1,25,000. Assume that the sale is uniform throughout the year. Credit sales would be
The amount of closing stock would be, when
Sales - Rs. 6,00,000
Opening Stock - Rs. 50,000
Purchases - Rs. 5,00,000
Productive Wages - Rs. 10,000
Carriage Inwards - Rs. 7,000
Rate of Gross Profit on cost - 20%
Match List–I with List–II :
List I
(Useful ratio)
List II
(Symptom)
(a)
Finished goods turnover ratio (i)
Liquidity crisis (b)
Interest coverage ratio (ii)
Inability to pay dues to financial institutions (c)
Debt-service coverage ratio (iii)
Inability to pay interest (d)
Current ratio and quick ratio (iv)
Falling demand for the product in the market
Select the correct answer using the codes given below.Consider the below mentioned statements and state the correct code of the statements being true or false.
Statement (I): A debt-equity ratio of 2 : 1 indicates that for every 1 unit of equity, the company has raised 2 units of debt.
Statement (II): The cost of floating an equity issue is lesser than the cost of floating a debt
Code:
Debt Service Coverage Ratio indicates which one of the following?
