The correct answer is D.
a. Operating profit = Gross profit – Operating expenses
b. Liquid liabilities = Current assets – Current liabilities
c. Capital employed = Equity share capital + Preference share capital + Long-term borrowings
d. Fixed assets ratio = Fixed assets ÷ Capital employed
Here is a brief explanation of each option:
a. Operating profit is the profit that a company makes from its core business activities. It is calculated by taking the gross profit and subtracting the operating expenses.
b. Liquid liabilities are the liabilities that a company expects to pay within the next year. They include current liabilities such as accounts payable, short-term loans, and accrued expenses.
c. Capital employed is the total amount of money that a company has invested in its business. It is calculated by adding together the equity share capital, preference share capital, and long-term borrowings.
d. Fixed assets ratio is a measure of a company’s financial leverage. It is calculated by dividing the fixed assets by the capital employed. A higher fixed assets ratio indicates that a company is more leveraged, which means that it has more debt financing.