Which of the following ratios are taken into consideration by a banker before sanctioning the loan?

The correct answer is D. All of the above.

A banker will consider all of the following ratios before sanctioning a loan:

• Proprietors ratio: This ratio measures the amount of equity that the owners have invested in the business. A higher proprietors ratio indicates that the business is less risky, as the owners have more skin in the game.
• Stock-turnover ratio: This ratio measures how quickly a business sells its inventory. A higher stock-turnover ratio indicates that the business is more efficient at selling its products, which can lead to higher profits.
• Debt-equity ratio: This ratio measures the amount of debt that a business has compared to its equity. A higher debt-equity ratio indicates that the business is more leveraged, which can be risky if interest rates rise.

Bankers will also consider other factors, such as the business’s cash flow, its credit history, and the collateral that it can offer, before making a decision on whether to approve a loan.