ratio analysis

Which of the following is not a current asset account?

• Inventory

• Prepaid Insurance

• Fixtures

• Bank

Current asset MINUS current liabilities is the

• Current Ratio

• Net Asset

• Net Worth

• Working Capital

Current assets DIVIDED BY current liabilities is the

• Current Ratio

• Quick Ratio

• Net Worth

• Working Capital

The quick ratio EXCLUDES which of the following accounts?

• Bank

• Cash

• Inventory

• Debtor

For its most recent year a company had Sales (all on credit) of $830,000 and Cost of Goods Sold of $525,000. At the beginning of the year, its Accounts Receivable were $80,000 and its Inventory was $100,000. At the end of the year, its Accounts Receivable were $86,000 and its Inventory was $110,000.

The inventory turnover ratio for the year was

• 4.8

• 4.9

• 5.0

• 7.9

Answer explanation

The inventory turnover = Cost of Goods Sold DIVIDED BY average Inventory. In this case that means $525,000 DIVIDED BY $105,000 = 5.0

Mathematical expression of two financial items is known as

• Mathematical Analysis

• Mathematical expression

• Ratio analysis

• Ratio expression

a) Liquidity Ratio explain the liquidity Position of the concern

b) Current ratio express the short term liquidity of the Concern

• Both the Statement are Correct

• A is Correct but B is Wrong

• B is Correct but A is Wrong

• Both the Statement are Wrong

Which of the following ratios are the indicator of returns provided by business:

• Efficiency

• Profitability

• Liquidity

• None of these

Which of the following transaction will result in an increase in current ratio:

• Goods costing $1000 sold on credit for $900

• Goods costing $1000 sold on cash for $900

• Goods costing $1000 sold in cash for $1100

• None of these

If working capital of a company is nil, what will be the current ratio?

• 1:1

• 0:1

• 1:0

• 2:1