What are the four basic categories of financial ratios?
A)current, turnover, asset, and earnings ratios
B)liquidity, leverage, and debt ratios
C)current, inventory, equity, and debt ratios
D)liquidity, asset management, leverage, and profitability ratios

Question

Quizplus · Accepted Answer

The four basic categories of financial ratios are liquidity ratios, asset management (or turnover) ratios, leverage (or debt) ratios, and profitability ratios. These categories help provide insight into different aspects of a company's financial health and performance. Choice D includes all four of these categories, making it the correct answer. Choice A is incorrect because it only includes three categories and uses different terminology for one of them. Choice B is incorrect because it only includes two categories and uses different terminology for one of them. Choice C is incorrect because it includes one category that is not part of the four basic categories of financial ratios.

What Are the Four Basic Categories of Financial Ratios