Which of the following is not correct about various

Solution

Income statement/profit and loss ratios are those ratios that are calculated by using the items of income statement/profit and loss account of a particular period only. Eg. Net profit ratio, gross profit ratio, operating ratio, etc. Balance sheet ratios are calculated by using data from the balance sheet only. Eg. current ratio, liquid ratio, and debt to equity ratio etc. Composite ratios are calculated by using the items of both income statement and balance sheet for the same period. Eg. inventory turnover ratio, receivables turnover ratio, accounts payable turnover ratio, and working capital turnover ratio etc.