The correct answer is: A. Balance Sheet Ratio.
A current ratio is a financial ratio that measures a company’s ability to pay short-term obligations. It is calculated by dividing a company’s current assets by its current liabilities. A current ratio of 2:1 or higher is generally considered to be healthy, as it indicates that the company has enough current assets to cover its current liabilities.
A profit and loss account is a financial statement that shows a company’s revenues, expenses, and net income for a specific period of time. A combined ratio is a financial ratio that measures the combined effect of a company’s underwriting losses and expenses. An income ratio is a financial ratio that measures a company’s profitability.
Here are some additional details about each of the options:
- A balance sheet is a financial statement that shows a company’s assets, liabilities, and equity at a specific point in time.
- A profit and loss account is a financial statement that shows a company’s revenues, expenses, and net income for a specific period of time.
- A combined ratio is a financial ratio that measures the combined effect of a company’s underwriting losses and expenses.
- An income ratio is a financial ratio that measures a company’s profitability.