Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R).
Assertion (A): Profitability ratios are calculated to analyse the earning capacity of the business which is the outcome of the utilisation of resources employed in the business.
Reason (R): Ratio analysis is helpful in taking investment decisions.
In the context of the above statements, which one of the following is correct?
1
Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
2
Both Assertion (A) and Reason (R) are true, and Reason (R) is not the correct explanation of Assertion (A).
3
Assertion (A) is true, but Reason (R) is false.
4
Assertion (A) is false, but Reason (R) is true.