{"id":8650,"date":"2024-04-15T03:04:01","date_gmt":"2024-04-15T03:04:01","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=8650"},"modified":"2024-04-15T03:04:01","modified_gmt":"2024-04-15T03:04:01","slug":"pick-up-the-correct-statement-from-the-following-a-the-ratio-of-current-assets-loans-and-advances-and-the-current-liquidity-is-called-current-ratio-b-larger-the-current-ratio-larger-is-the-margi","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/pick-up-the-correct-statement-from-the-following-a-the-ratio-of-current-assets-loans-and-advances-and-the-current-liquidity-is-called-current-ratio-b-larger-the-current-ratio-larger-is-the-margi\/","title":{"rendered":"Pick up the correct statement from the following: A. The ratio of current assets, loans and advances, and the current liquidity is called current ratio B. Larger the current ratio, larger is the margin of safety C. The operating profit is the difference between gross profit and operating expenses D. All of these"},"content":{"rendered":"<p>\r\n    <!-- Check if it's an AMP page -->\r\n            <!-- Non-AMP version -->\r\n        <div class=\"mcq-container\" data-quiz-id=\"quizState_6a9bafe97f234\">\r\n                                            <div class=\"option\" data-option-key=\"option1\" data-is-correct=\"false\">\r\n                    The ratio of current assets, loans and advances, and the current liquidity is called current ratio                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option2\" data-is-correct=\"false\">\r\n                    Larger the current ratio, larger is the margin of safety                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option3\" data-is-correct=\"false\">\r\n                    The operating profit is the difference between gross profit and operating expenses                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option4\" data-is-correct=\"true\">\r\n                    All of these                <\/div>\r\n                            \r\n            <!-- Feedback messages for non-AMP -->\r\n            <div class=\"feedback\" data-feedback=\"wrong\">Answer is Right!<\/div>\r\n            <div class=\"feedback\" data-feedback=\"right\">Answer is Wrong!<\/div>\r\n        <\/div>\r\n\r\n        <script>\r\n        document.addEventListener('DOMContentLoaded', function () {\r\n            var containers = document.querySelectorAll('.mcq-container');\r\n\r\n            containers.forEach(function(container) {\r\n                var options = container.querySelectorAll('.option');\r\n                var feedbackSelect = container.querySelector('[data-feedback=\"select\"]');\r\n                var feedbackWrong = container.querySelector('[data-feedback=\"wrong\"]');\r\n                var feedbackRight = container.querySelector('[data-feedback=\"right\"]');\r\n\r\n                options.forEach(function(option) {\r\n                    option.addEventListener('click', function() {\r\n                        var selectedOption = option.getAttribute('data-option-key');\r\n                        var isCorrect = option.getAttribute('data-is-correct') === 'true';\r\n\r\n                        \/\/ Remove previous selections\r\n                        options.forEach(function(opt) {\r\n                            opt.classList.remove('correct', 'incorrect');\r\n                        });\r\n\r\n                        \/\/ Add the correct\/incorrect class\r\n                        if (isCorrect) {\r\n                            option.classList.add('correct');\r\n                            feedbackRight.hidden = false;\r\n                            feedbackWrong.hidden = true;\r\n                        } else {\r\n                            option.classList.add('incorrect');\r\n                            feedbackRight.hidden = true;\r\n                            feedbackWrong.hidden = false;\r\n                        }\r\n\r\n                        \/\/ Hide select feedback\r\n                        feedbackSelect.hidden = true;\r\n                    });\r\n                });\r\n            });\r\n        });\r\n        <\/script>\r\n    \r\n    <!--more--><\/p>\n<p>The correct answer is D. All of these.<\/p>\n<p>A current ratio is a liquidity ratio that measures a company&#8217;s ability to pay short-term obligations. It is calculated by dividing current assets by current liabilities. A higher current ratio indicates that a company has more assets available to cover its short-term liabilities.<\/p>\n<p>A margin of safety is the difference between a company&#8217;s actual sales and its break-even point. It measures how much sales can decline before the company starts to lose money. A higher margin of safety indicates that a company is less vulnerable to changes in sales.<\/p>\n<p>Operating profit is a measure of a company&#8217;s profitability from its core business operations. It is calculated by subtracting operating expenses from gross profit. Operating profit is a key measure of a company&#8217;s financial performance.<\/p>\n<p>Here are some additional details about each of these concepts:<\/p>\n<ul>\n<li>Current ratio: The current ratio is a liquidity ratio that measures a <div class=\"youtube-subscribe-container\">\r\n        <a href=\"https:\/\/www.youtube.com\/channel\/UCNHT8lW-JmLC68rjBfZhdkg?sub_confirmation=1\" target=\"_blank\" class=\"youtube-subscribe-button\">\r\n            <span class=\"youtube-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 576 512\">\r\n                    <path d=\"M549.7 124.1c-6.3-23.7-24.8-42.3-48.3-48.6C458.8 64 288 64 288 64S117.2 64 74.6 75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Subscribe on YouTube\r\n        <\/a>\r\n    <\/div> company&#8217;s ability to pay short-term obligations. It is calculated by dividing current assets by current liabilities. A higher current ratio indicates that a company has more assets available to cover its short-term liabilities. A current ratio of 2:1 is generally considered to be a good level of liquidity.<\/li>\n<li>Margin of safety: The margin of safety is the difference between a company&#8217;s actual sales and its break-even point. It measures <div class=\"telegram-channel-container\">\r\n        <a href=\"https:\/\/t.me\/pscnotes2025\" target=\"_blank\" class=\"telegram-channel-button\">\r\n            <span class=\"telegram-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 496 512\">\r\n                    <path fill=\"white\" d=\"M248,8C111,8,0,119,0,256s111,248,248,248s248-111,248-248S385,8,248,8z M362,177L320,367c-3,14-10,18-20,14l-56-41l-27,26 c-3,3-5,5-10,5l4-63L323,196c5-5-1-7-8-3l-98,62l-42-13c-9-3-10-9,2-14l162-63C351,160,365,164,362,177z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Join Our Telegram Channel\r\n        <\/a>\r\n    <\/div> how much sales can decline before the company starts to lose money. A higher margin of safety indicates that a company is less vulnerable to changes in sales. The margin of safety can be calculated as follows:<\/li>\n<\/ul>\n<p>Margin of safety = Actual sales &#8211; Break-even sales<\/p>\n<ul>\n<li>Operating profit: Operating profit is a measure of a company&#8217;s profitability from its core business operations. It is calculated by subtracting operating expenses from gross profit. Operating profit is a key measure of a company&#8217;s financial performance. Operating profit can be calculated as follows:<\/li>\n<\/ul>\n<p>Operating profit = Gross profit &#8211; Operating expenses<\/p>\n<p>I hope this information is helpful. Please let me know if you have any other questions.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Join Our Telegram Channel Subscribe on YouTube<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[656],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Pick up the correct statement from the following: A. The ratio of current assets, loans and advances, and the current liquidity is called current ratio B. Larger the current ratio, larger is the margin of safety C. The operating profit is the difference between gross profit and operating expenses D. All of these<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/pick-up-the-correct-statement-from-the-following-a-the-ratio-of-current-assets-loans-and-advances-and-the-current-liquidity-is-called-current-ratio-b-larger-the-current-ratio-larger-is-the-margi\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Pick up the correct statement from the following: A. The ratio of current assets, loans and advances, and the current liquidity is called current ratio B. Larger the current ratio, larger is the margin of safety C. The operating profit is the difference between gross profit and operating expenses D. All of these\" \/>\n<meta property=\"og:description\" content=\"Join Our Telegram Channel Subscribe on YouTube\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/pick-up-the-correct-statement-from-the-following-a-the-ratio-of-current-assets-loans-and-advances-and-the-current-liquidity-is-called-current-ratio-b-larger-the-current-ratio-larger-is-the-margi\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2024-04-15T03:04:01+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Pick up the correct statement from the following: A. The ratio of current assets, loans and advances, and the current liquidity is called current ratio B. Larger the current ratio, larger is the margin of safety C. The operating profit is the difference between gross profit and operating expenses D. All of these","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/pick-up-the-correct-statement-from-the-following-a-the-ratio-of-current-assets-loans-and-advances-and-the-current-liquidity-is-called-current-ratio-b-larger-the-current-ratio-larger-is-the-margi\/","og_locale":"en_US","og_type":"article","og_title":"Pick up the correct statement from the following: A. The ratio of current assets, loans and advances, and the current liquidity is called current ratio B. Larger the current ratio, larger is the margin of safety C. The operating profit is the difference between gross profit and operating expenses D. All of these","og_description":"Join Our Telegram Channel Subscribe on YouTube","og_url":"https:\/\/exam.pscnotes.com\/mcq\/pick-up-the-correct-statement-from-the-following-a-the-ratio-of-current-assets-loans-and-advances-and-the-current-liquidity-is-called-current-ratio-b-larger-the-current-ratio-larger-is-the-margi\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2024-04-15T03:04:01+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/exam.pscnotes.com\/mcq\/pick-up-the-correct-statement-from-the-following-a-the-ratio-of-current-assets-loans-and-advances-and-the-current-liquidity-is-called-current-ratio-b-larger-the-current-ratio-larger-is-the-margi\/","url":"https:\/\/exam.pscnotes.com\/mcq\/pick-up-the-correct-statement-from-the-following-a-the-ratio-of-current-assets-loans-and-advances-and-the-current-liquidity-is-called-current-ratio-b-larger-the-current-ratio-larger-is-the-margi\/","name":"Pick up the correct statement from the following: A. The ratio of current assets, loans and advances, and the current liquidity is called current ratio B. Larger the current ratio, larger is the margin of safety C. The operating profit is the difference between gross profit and operating expenses D. All of these","isPartOf":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#website"},"datePublished":"2024-04-15T03:04:01+00:00","dateModified":"2024-04-15T03:04:01+00:00","author":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209"},"breadcrumb":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/pick-up-the-correct-statement-from-the-following-a-the-ratio-of-current-assets-loans-and-advances-and-the-current-liquidity-is-called-current-ratio-b-larger-the-current-ratio-larger-is-the-margi\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/exam.pscnotes.com\/mcq\/pick-up-the-correct-statement-from-the-following-a-the-ratio-of-current-assets-loans-and-advances-and-the-current-liquidity-is-called-current-ratio-b-larger-the-current-ratio-larger-is-the-margi\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/exam.pscnotes.com\/mcq\/pick-up-the-correct-statement-from-the-following-a-the-ratio-of-current-assets-loans-and-advances-and-the-current-liquidity-is-called-current-ratio-b-larger-the-current-ratio-larger-is-the-margi\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/exam.pscnotes.com\/mcq\/"},{"@type":"ListItem","position":2,"name":"mcq","item":"https:\/\/exam.pscnotes.com\/mcq\/category\/mcq\/"},{"@type":"ListItem","position":3,"name":"Civil engineering","item":"https:\/\/exam.pscnotes.com\/mcq\/category\/mcq\/civil-engineering\/"},{"@type":"ListItem","position":4,"name":"Engineering economics","item":"https:\/\/exam.pscnotes.com\/mcq\/category\/mcq\/civil-engineering\/engineering-economics\/"},{"@type":"ListItem","position":5,"name":"Pick up the correct statement from the following: A. The ratio of current assets, loans and advances, and the current liquidity is called current ratio B. Larger the current ratio, larger is the margin of safety C. The operating profit is the difference between gross profit and operating expenses D. All of these"}]},{"@type":"WebSite","@id":"https:\/\/exam.pscnotes.com\/mcq\/#website","url":"https:\/\/exam.pscnotes.com\/mcq\/","name":"MCQ and Quiz for Exams","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/exam.pscnotes.com\/mcq\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209","name":"rawan239","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/d97f17072bfa490596c8f78363955d55?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/d97f17072bfa490596c8f78363955d55?s=96&d=mm&r=g","caption":"rawan239"},"sameAs":["https:\/\/exam.pscnotes.com"],"url":"https:\/\/exam.pscnotes.com\/mcq\/author\/rawan239\/"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/8650"}],"collection":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/comments?post=8650"}],"version-history":[{"count":0,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/8650\/revisions"}],"wp:attachment":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/media?parent=8650"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/categories?post=8650"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/tags?post=8650"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}