Financial Ratios

Understanding Financial Ratios and Their Classifications:
\begin{itemize} \item
Current Ratio (A): Liquidity ratio that measures a company's ability to cover its short-term obligations with its short-term assets. \item
Inventory Turnover Ratio (B): Activity ratio that shows how effectively a company is using its inventory to generate sales. \item
Return on Investment (C): Profitability ratio that measures the gain or loss generated on an investment relative to its cost. \item
Proprietary Ratio (D): Solvency ratio that shows the proportion of a company’s equity to its total assets, indicating long-term financial stability. \end{itemize} Thus, the correct matching is (A)-(II), (B)-(IV), (C)-(III), (D)-(I).