The correct answer is: D. 4.75 : 1.43
Solvency ratio is a measure of a company’s ability to pay off its long-term debts. It is calculated by dividing a company’s long-term assets by its long-term liabilities.
In this case, the company’s long-term assets are Rs. 1,80,000 and its long-term liabilities are Rs. 1,00,000. Therefore, the company’s solvency ratio is 1.8 : 1.
However, the question asks for the solvency ratio of the business, which includes both long-term and current assets and liabilities. The company’s current assets are Rs. 1,60,000 and its current liabilities are Rs. 40,000. Therefore, the company’s solvency ratio is 4.75 : 1.43.
Option A is incorrect because it does not take into account the company’s current assets and liabilities. Option B is incorrect because it does not take into account the company’s long-term assets. Option C is incorrect because it does not take into account the company’s current liabilities.