RATIO ANALYSIS

Q 1  Give the formula of cost of goods sold if sales and gross profits are not given.

• opening stock +direct expenses -closing stock
• opening stock -direct expenses + closing stock
• Sales - Gross profit
• Sales + Gross profit

Solvency Ratios are calculated to find  out  asscertain:-

• current position of the business
• Operational efficiency of the business
• Profitability conditions of the business
• Long term financial position of the Business

Ideal proprietary  ratio is

• 25 %
• 50 %
• 75 %
• 100 %

Q 4 When the concept of ratio is defined in respected to the items shown in the financial statements, it is termed as 

• a ) Accounting ratio
• b) Financial ratio
• c) Costing ratio
• d) None of the above

Q 5 The relationship between two financial variables can be expressed in:

• a) Pure ratio
• b) Percentage
• c) Rate or time
• d) Either of the above

Q 6 Liquidity ratios are expressed in

• a) Pure ratio form
• b) Percentage
• c) Rate or time
• d) None of the above

Q 7 Profit for the objective of calculating a ratio may be taken as

• a) Profit before tax but after interest 
• b) Profit before interest and tax
• c) Profit after interest and tax
• d) All of the above

Q 8 10)  Current ratio is 4:1.Net Working Capital is Rs.30,000.Find the amount of current Assets is 

• a) Rs.10,000 
• b) Rs 40,000
•     c) Rs.24,000
• d) Rs.6,000

 Q 9 Gross Profit ratio is also termed as 

• a) Gross Profit Margin 
• b) Gross Margin to net sales
• c) Both a and b
• d) All of the above

Q 10 Given Sales is 1, 20,000 and Gross Profit is 30,000, the gross profit ratio is

• a) 24%
• b) 25%
• c) 40%
• d) 44%%