UI Post-UTME Financial Accounting 2025 (Model questions) Question 25

Which of the following statements about ratio analysis are CORRECT?
I. A high gearing ratio indicates a company relies heavily on debt financing
II. Return on capital employed measures how efficiently capital generates profit
III. A current ratio of 2:1 is the ideal benchmark for every type of business
IV. A short debtor collection period is generally favourable to a business

1. A.I, II and IV only
2. B.I and III only
3. C.II, III and IV only
4. D.All of the above