CBSE 2026 · Region 4 · Set 2 · Q27

Which of the following statements are correct ? I. A low current ratio endangers the business and puts it at risk of facing a situation, where it will not be able to pay its short-term debts on time. II. Trade payables turnover ratio expresses the relationship between net credit sales and average trade payables. III. Operating profit ratio plus Gross profit ratio = 100. IV. Inventory turnover ratio determines the number of times inventory is converted into revenue from operations during the accounting period under consideration. Options :

OR

Ratios that are calculated for measuring the efficiency of operations of business based on effective utilisation of resources are called :