The correct answer is: C. a-3, b-1, c-4, d-2
Debtor’s turnover ratio is an activity ratio that measures how efficiently a company collects its receivables. It is calculated by dividing net credit sales by average accounts receivable. A higher ratio indicates that a company is collecting its receivables more quickly.
Proprietary ratio is a solvency ratio that measures the amount of equity that a company has relative to its debt. It is calculated by dividing total equity by total assets. A higher ratio indicates that a company has a stronger financial position.
Operating ratio is an efficiency ratio that measures how efficiently a company generates sales. It is calculated by dividing operating expenses by net sales. A lower ratio indicates that a company is more efficient in generating sales.
Acid test ratio is a liquidity ratio that measures a company’s ability to meet its short-term obligations. It is calculated by dividing quick assets by current liabilities. A higher ratio indicates that a company has a stronger liquidity position.
Profitability ratio is a measure of a company’s profitability. It is calculated by dividing net income by net sales. A higher ratio indicates that a company is more profitable.
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