Question 2
Match the “Definition” in Colum-X to its appropriate “Ratio” in Column-Y.
| Column-X | Column-Y |
|---|---|
| 1. The ability of the firm to pay its way | A. Profitability Ratio |
| 2. Information to enable decisions to be made on the extent of risk and earning potential of a business investment | B. Gearing Ratio |
| 3. Information on relationship between the exposure of the business to loans as opposed to share capital | C. Investment Ratio |
| 4. How effective the firm is at generating profits given sales | D. Financial Ratio |
| E. Liquidity Ratio |
1-E, 2-C, 3-B, 4-A
1-E, 2-C, 3-B, 4-D
1-B, 2-C, 3-E, 4-A
1-B, 2-C, 3-E, 4-D