Financial Ratios Assessment

A comparison between two numbers showing how many times one number exceeds the other.

• return on investment
• profitability ratios
• ratio
• efficiency ratios

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

The comparison of a firm's current assets to current liabilities. The ratio indicates the amount of current assets available to pay off $1 of current debt.

• acid test/ quick ratio
• asset turnover ratio
• current ratio
• inventory turnover

Indicates a firm's ability to quickly liquidate assets to pay off current debts.

• asset turnover ratio
• inventory turnover
• debt-to-assets ratio
• acid test/ quick ratio

This document communicates what the entity owns in terms of assets, what it owes in the terms of liabilities, and the difference between those two which represents what the owners o the company are entitled to.

• Income Statement
• Balance Sheet

If total expenses exceed total revenue, a net loss is reported

• True
• False

The financial statement that reports whether the business earned a profit and also lists the revenues and expenses is called the: 

• Balance Sheet
• Statement of Retained Earnings
• Statement of Cash Flows
• Income Statement

Mathematical expression of two financial items is known as

• Mathematical Analysis

• Mathematical expression

• Ratio analysis

• Ratio expression

Current assets of £8m (£4m is stock) & Current Liabilities of £2m. What is their current ratio?

• 1:2
• 4:1
• 2:1
• 1:4