Match List-I with List-II:

$$\begin{gathered} \begin{array}{cccc}& \text{List-I (Formula)}& & \text{List-II (Ratio)}\\ \text{(A)}& \frac{\text{Earning before Interest and tax}}{\text{Interest}}& \text{(I)}& \text{Earnings per Share}\\ \text{(B)}& \frac{\text{Profit after Tax and Interest}}{\text{Number of Equity Shares}}& \text{(II)}& \text{Return on Investment Ratio}\\ \text{(C)}& \frac{\text{Profit after tax + Depreciation}\text{+Interest − Non cash Expenses}}{\text{Preference Dividend +} \\ \text{Interest + Repayment Obligation}}& \text{(III)}& \text{Interest Coverage Ratio}\\ \text{(D)}& \frac{\text{Net Profit before Interest and Tax}}{\text{Capital Employed}}& \text{(IV)}& \text{Debt Services Coverage Ratio}\end{array} \end{gathered}$$

Choose the correct answer from the options given below:

The correct option is (A)-(III), (B)-(I), (C)-(IV), (D)-(II) (represented in the options list as "(A)-(III), (B)-(I), (C)-(IV), (D)-(I1(").

Let us break down each financial ratio step-by-step to understand the logic behind the matching:

1. Matching (A) with (III):
List-I (Formula A) is:
$\frac{\text{Earning before Interest and tax}}{\text{Interest}}$
This ratio measures how many times a company can cover its interest expenses using its operating profit (EBIT). Therefore, this is the formula for the Interest Coverage Ratio (III).

2. Matching (B) with (I):
List-I (Formula B) is:
$\frac{\text{Profit after Tax and Interest}}{\text{Number of Equity Shares}}$
This ratio determines the portion of a company's profit allocated to each outstanding share of common stock. It represents Earnings per Share (I).

3. Matching (C) with (IV):
List-I (Formula C) is:
$\frac{\text{Profit after tax + Depreciation + Interest - Non cash Expenses}}{\text{Preference Dividend + Interest + Repayment Obligation}}$
This formula determines the ability of a firm to pay its total debt service obligations (interest, principal repayments, and preference dividends) from its operating cash flows. This is the Debt Service Coverage Ratio (IV).

4. Matching (D) with (II):
List-I (Formula D) is:
$\frac{\text{Net Profit before Interest and Tax}}{\text{Capital Employed}}$
This ratio indicates the efficiency and profitability of a company's capital investments, showing how much profit is generated per unit of capital employed. Hence, it is the Return on Investment Ratio (II) (also known as ROCE).