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    Question

    Akash Ltd wants to know its ability to meet its

    short-term obligations towards the various stakeholders. Which category of the following ratios can help it in analysing this?
    A Profitability Correct Answer Incorrect Answer
    B Efficiency Correct Answer Incorrect Answer
    C Activity Correct Answer Incorrect Answer
    D Solvency Correct Answer Incorrect Answer
    E Liquidity Correct Answer Incorrect Answer

    Solution

    Liquidity ratios helps in analyzing the ability of the company to meet its short-term obligations towards the various stakeholders whereas Solvency Ratios helps in analyzing the ability of the company to meet its long-term contractual obligations towards the various stakeholders. It depicts how well the company is capitalized and if there can be any danger to its long term existence. Profitability Ratios helps in analysing different profitability margins. 

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