12th Accountancy - Ratio Analysis

What is the formula for calculating Current Ratio?

• Current Ratio = Current Assets - Current Liabilities

• Current Ratio = Current Assets / Current Liabilities

• Current Ratio = Fixed Assets / Current Liabilities

• Current Ratio = Total Assets / Total Liabilities

Calculate the Debt Ratio if Total Liabilities are $50,000 and Total Assets are $100,000.

• 75%

• 50%

• 40%

• 25%

If a company's Net Income is $250,000 and Total Assets are $1,000,000, calculate the Return on Assets (ROA).

• ROA = Net Income * Total Assets = $200,000 * $1,000,000 = $200,000,000

• ROA = Net Income - Total Assets = $200,000 - $1,000,000 = -$800,000

• ROA = Net Income / Total Assets = $ 250000/ 1000000=•25 or 25%

• ROA = Net Income + Total Assets = $200,000 + $1,000,000 = $1,200,000

What is the formula for calculating Gross Profit Margin?

• Revenue / COGS * 100

• (Revenue - COGS) / Revenue * 100

• (COGS - Revenue) / COGS * 100

• Revenue / (COGS * 100)

What is formula for Liquid Ratio

• Current Assets/Current Liabilities

• Liquid Assets/Current Liabilities

• GP/Sales

• Debt/Equity

Calculate the Operating Profit Margin if Operating Income is $40,000 and Net Sales are $200,000.

• 30%

• 15%

• 20%

• 40%