Explain how ratios may be used to assess the profitability
and liquidity of a business
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Answer Posted / ankita jaiswal
for liquidity ratio there are two-1)current ratio 2)quick
ratio. for profitability they are divided into 2 categories-
1)on sales basis-a)gross profit ratio b)net profit ratio c)
operating ratio
2)on investment basis-a)return on capital employed b)return
on shareholders fund c)earning per share
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