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Need for Analysis of Financial Information

If both varia...

Question

If both variables are from balance sheet, the ratios are classified as ____________ ratios.

A

Income statement

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B

Balance sheet

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C

Profitability

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D

Liquidity

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Solution

The correct option is B Balance sheet
If both the variables are from the balance sheet the ratios are classified as balance sheet ratios. For example Current ratio which is the ratio of Current assets to Current liabilities, here both the figures are from balance sheet.

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