Question 5 of 47beginner🧠 RememberMCQ1 mark
The following groups of ratios are primarily measure risk:
Exercise: Test your Understanding – II | Q: (i) | (Page 21)
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Explanation
Option D is the correct answer. According to the provided context, Liquidity ratios measure the ability to satisfy short-term obligations, and Debt (Solvency) ratios measure the ability to service debt in the long run; both are measures of financial risk. Activity ratios, however, measure the speed of conversion into cash/revenue (efficiency), not risk. Since Options A, B, and C all include Activity ratios, they are incorrect. Option D is the correct group as it combines Liquidity and Debt (risk measures) with Profitability, excluding the efficiency-based Activity ratios.