Analysing Comparative Statement of Profit and Loss
When one vari...
Question
When one variable is from income statement and another variable from balance sheet it is known as___________ratio.
A
Balance sheet
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B
Income statement
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C
Composite
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D
All of the above
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Solution
The correct option is C Composite When one variable is from income statement and another variable from balance sheet it is known as composite ratio. For example Trade receivable turnover ratio is calculated using the Net credit sales figure from the income statement and the Average balance of trade receivables figure from the balance sheet.