The gross profit margin ratio is calculated by dividing:

• Profit by sales

• Profit by shareholders’ equity

• Gross profit by sales

• Sales by cost of sales

Financial ratios that tell how well a company can pay off its short-term debts and meet unexpected needs for cash.

• liquidity ratios
• efficiency ratios
• leverage ratios
• profitability ratios

Financial ratios that tell how much of each dollar of sales, assets, and owner's investments resulted in net profit.

• liquidity ratios
• efficiency ratios
• profitability ratios
• leverage ratios

What is the formula for Gross Profit Margin

• Profit / Net sales revenue X 100

• Gross profit / Net sales revenue X 100

• Gross profit / Sales revenue X 100

• Profit / Cost of sales X 100

The current ratio is also known as the:

• Quick ratio

• Working capital ratio

• Cash flow ratio

• Capital structure ratio

If at year end Cash is $5,460, Accounts Receivable is $3,505, Current Assets are $18,475, and Current Liabilities are $18,860; what is the current ratio?

• 0.48:1

• 0.98:1

• 0.45:1

• 1.45:1

What does PPE stand for?

• Payable, Property, and Equipment

• Prepaid, Property, and Expenses

• Prepaid, Property, and Equipment

• Plant, Property and Equipment

What does a current ratio tell us?

• A higher current ratio indicates better liquidity.

• A lower current ratio indicates better liquidity

• A higher current ratio indicates what portion of assets are tied up in slow moving inventory

• A lowercurrent ratio indicates what portion of assets are tied up in slow moving inventory

How do you find Working Capital?

• Assets - Liabilities

• Current Assets - Owner's Capital

• Current Assets - Current Liabilities

• Long Term Assets - Long Term Liabilities

What does liquidity mean?

• The company's ability to pay its obligations.

• The company's ability to collect its receivables.

• The company's ability to increase financing

• The company's ability to obtain a new loan