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Question

The most commonly used classification of ratio is .

A
Activity ratios
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B
Solvency ratios
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C
Liquidity ratios
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D
All of the above
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Solution

The correct option is D All of the above
The functional classification is based on the purpose for which the ratio is computed is and it is as follows:
  1. Activity ratios
  2. Solvency ratios
  3. Liquidity ratios
  4. Profitability ratios

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