Question

Match List I (Accounting Ratios) with List II (Formula of Ratios) and select the correct answer using the codes given below the Lists:

List I	List II
A. Operating Ratio.	1. \[\frac{\text{Shareholders' Funds}}{\text{Total Assets}}\]
B. Proprietary Ratio.	2. \[\frac{\text{Revenue from Operations}}{\text{Working Capital}}\]
C. Interest Coverage Ratio	3. \[\frac{\text{Cost of Revenue from Operations + Operating Expenses}}{\text{Revenue from Operations}} \times 100.\]
D. Working Capital Turnover Ratio	4. \[\frac{\text{Net Profit before Interest and Tax}}{\text{Interest on Long-term Borrowings}}\]

Options

• A - 3, B - 2, C - 1, D - 4.

• A - 4, B - 1, C - 3, D - 2.

• A - 3, B - 2, C - 4, D - 1.

• A - 3, B - 1, C - 4, D - 2.

Answer 1

A - 3, B - 1, C - 4, D - 2.

Explanation:

List I	List II
A. Operating Ratio.	3. \[\frac{\text{Cost of Revenue from Operations + Operating Expenses}}{\text{Revenue from Operations}} \times 100.\]
B. Proprietary Ratio.	1. \[\frac{\text{Shareholders' Funds}}{\text{Total Assets}}\]
C. Interest Coverage Ratio	4. \[\frac{\text{Net Profit before Interest and Tax}}{\text{Interest on Long-term Borrowings}}\]
D. Working Capital Turnover Ratio	2. \[\frac{\text{Revenue from Operations}}{\text{Working Capital}}\]