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Financial Market Management — CBSE Class 10 board question

Q1. [1]
Long term solvency of a firm can be judged by using which ratios ?
Previously asked in CBSE board exam
2023 92 Q12
Generated by claude-sonnet-4-6 · 2026-06-15 07:07 · grounding rag
Model Answer

Long-term solvency of a firm can be judged by using Leverage/Capital Structure Ratios (e.g., Debt-Equity Ratio, Interest Coverage Ratio).

Source: Chapter 10, Leverage/Capital Structure Ratios

Explanation

The examiner expects you to name the ratio category — Leverage or Capital Structure Ratios — not individual ratios. Mentioning one example is a good habit for a 1-mark answer but not strictly required. Avoid writing about liquidity ratios; those measure short-term solvency.

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