Best indicator of the overall efficiency of a business concern is:

Profitability ratio
Debt equity ratio
Acid test ratio
Current ratio

The correct answer is A. Profitability ratio.

A profitability ratio is a financial ratio that measures a company’s ability to generate profit from its revenue. Profitability ratios are used to compare a company’s performance to its peers and to its own historical performance.

There are many different types of profitability ratios, but some of the most common include:

  • Return on assets (ROA): This ratio measures a company’s net income as a percentage of its total assets.
  • Return on equity (ROE): This ratio measures a company’s net income as a percentage of its total equity.
  • Return on sales (ROS): This ratio measures a company’s net income as a percentage of its total sales.

Profitability ratios are important because they provide a measure of a company’s ability to generate profits. This information can be used to assess a company’s financial health and to make investment decisions.

The other options are not as good indicators of overall efficiency because they do not measure a company’s ability to generate profits.

  • Debt equity ratio: This ratio measures a company’s debt as a percentage of its equity. It is a measure of a company’s financial leverage.
  • Acid test ratio: This ratio measures a company’s ability to meet its short-term obligations. It is calculated by dividing a company’s current assets by its current liabilities.
  • Current ratio: This ratio measures a company’s ability to meet its short-term obligations. It is calculated by dividing a company’s current assets by its current liabilities.
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