Question
Match the financial ratios with their correct
interpretation:Solution
- Current Ratio (2) : Measures a company's ability to cover short-term obligations using current assets.
- Debt-to-Equity Ratio (3) : Assesses financial leverage by comparing total debt to shareholders' equity.
- Return on Equity (4) : Indicates how efficiently a company generates profit from shareholders’ investment.
- Net Profit Margin (1) : Reflects the percentage of revenue converted into profit after expenses.
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