Identify the ratio which is not computed for evaluating solvency of the business.
This question was previously asked in
Shift 29/05/2023 3:30 PM - 6:30 PM
A
Debt-Equity Ratio
B
Proprietary Ratio
C
Operating Ratio
D
Interest Coverage Ratio
Correct Answer
Operating Ratio
Detailed Explanation
The ratio that is not computed for evaluating the solvency of the business is:
- Operating Ratio.
The Debt-Equity Ratio, Proprietary Ratio, and Interest Coverage Ratio are all used to assess various aspects of a company's solvency, financial stability, and ability to meet its financial obligations. The Operating Ratio, on the other hand, is typically used to evaluate the operational efficiency and profitability of a business, not its solvency.
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