BANKING AND MANAGEMENT OF FINANCIAL STATEMENT

Efficiency ratios highlights:

• How well assets and liabilities are managed

• Measures how quickly assets can be converted to cash

• Share of ownership in a company

• A comparison of two amounts

What does a high return on assets ratio indicate?

• High debt levels
• Poor liquidity
• Low profitability
• Efficient asset utilization

What are the two main components of an income statement?

• Revenue and expenses
• Cash flow and investments
• Equity and retained earnings
• Assets and liabilities

What is the purpose of income statement ratios?

• To evaluate a company's solvency
• To assess a company's profitability
• To determine a company's market value
• To measure a company's liquidity

Which ratio measures a company's overall profitability?

• Debt-to-equity ratio
• Return on assets
• Current ratio
• Operating profit margin

1. 1. Ability of organization to cover the short term obligation related to

• PROFITABILITY RATIO

• LIQUIDITY RATIO

• EFFIENCENCY RATIO

• LEVERAGE RATIO

Return on asset is known as return on investment

• TRUE

• FALSE

Two profitability ratios are:

• Return on Assets (ROA)

• Quick Ratio

• Return on Equity (ROE)

• Debt to Equity

The feature of a well-functioning investment industry that gives investors the ability to quickly buy and sell a significant amount of an investment without having a material impact on the price is described as:

• Risk transfer

• Liquidity

• Competitive markets

• None of the above

ROE means...

• Risk of equity

• Return on equity

• Revenue of equipment

• Ratio of equity