IPM Quiz

Which of the following is NOT a primary component of financial statements?

• Balance Sheet

• Income Statement

• Report of BOD

• Cash Flow Statement

When assets are subtracted from liabilities, it will be equal to?

• Capital

• Net Income

• Working Capital

• Goodwill

What does a high debt-to-equity ratio typically suggest?

• Strong profitability

• Low financial risk

• High reliance on debt financing

• Efficient use of assets

Which ratio measures the efficiency of a company's inventory management?

• Gross profit margin

• ROE

• Inventory turnover ratio

• EPS

What is the main difference between vertical and horizontal analysis?

• One shows % increase, other shows % decrease

• One take the denominator value to be a specific base year, other takes it to be any base item

• One shows growth from period to period, other shows current year growth

• Both use different ratios

Which of the following is NOT a benefit of analyzing financial statements?

• Assessing past performance and current financial health

• Making informed decisions about investment opportunities

• Identifying trends and patterns

• Predicting with certainty the future financial performance