[amp_mcq option1=”Profitability ratio” option2=”Liquidity ratio” option3=”Turnover ratio” option4=”All of these” correct=”option4″]
The correct answer is D. All of these.
Financial ratios are a tool used to analyze a company’s financial statements. They can be used to compare a company’s performance to its own past performance, to the performance of other companies in the same industry, or to industry averages.
There are three main types of financial ratios: profitability ratios, liquidity ratios, and turnover ratios.
Profitability ratios measure a company’s ability to generate profit. Some common profitability ratios include return on assets (ROA), return on equity (ROE), and gross profit margin.
Liquidity ratios measure a company’s ability to meet its short-term obligations. Some common liquidity ratios include current ratio, quick ratio, and cash ratio.
Turnover ratios measure a company’s efficiency in using its assets to generate sales. Some common turnover ratios include inventory turnover ratio, accounts receivable turnover ratio, and accounts payable turnover ratio.
Financial ratios can be a valuable tool for investors, analysts, and managers. They can be used to identify strengths and weaknesses in a company’s financial performance, and to track the company’s progress over time.