Financial Concepts Quiz

What is the formula for calculating Gross Profit Margin according to the formula sheet?

• Gross Profit/Revenue x 100

• Gross Profit/Cost of Sales x 100

• Profit/Revenue x 100

• Sales Revenue - Cost of Goods Sold

How is the Break-Even Output determined?

• Total Fixed Costs / Unit Contribution

• Total Revenue - Total Costs

• Selling Price x Quantity Sold

• Total Fixed Costs + Total Variable Costs

Which equation correctly represents the Current Ratio?

• Current Assets / Current Liabilities

• Current Assets - Inventory / Current Liabilities

• Trade Receivables / Credit Sales x 365

• Net Current Assets / Capital Employed

What does the Profit Margin formula calculate?

• Profit/Revenue x 100

• Gross Profit/Revenue x 100

• Profit/Capital Employed x 100

• Sales Revenue - Cost of Goods Sold

What is the formula for calculating Net Profit Margin?

• Net Profit / Revenue x 100

• Net Profit / Gross Profit x 100

• Revenue / Net Profit x 100

• Cost of Goods Sold / Net Profit x 100

How is Return on Investment (ROI) calculated?

• (Net Profit / Investment) x 100

• (Gross Profit / Investment) x 100

• (Revenue / Net Profit) x 100

• (Investment / Net Profit) x 100

Which formula correctly calculates the Inventory Turnover Ratio?

• Cost of Goods Sold / Average Inventory

• Total Sales / Average Inventory

• Average Inventory / Cost of Goods Sold

• Net Sales / Cost of Goods Sold

What is the formula for calculating the Debt-to-Equity Ratio?

• Total Liabilities / Total Equity

• Total Debt / Total Assets

• Total Equity / Total Liabilities

• Total Assets / Total Debt

How is the Quick Ratio (Acid Test Ratio) calculated?

• (Current Assets - Inventory) / Current Liabilities

• Current Assets / Current Liabilities

• Total Assets / Total Liabilities

• (Current Liabilities - Inventory) / Current Assets

Which formula is used to compute the Earnings Per Share (EPS)?

• (Net Income - Dividends on Preferred Stock) / Average Outstanding Shares

• Total Revenue / Total Shares Outstanding

• Net Income / Total Equity

• Gross Profit / Total Shares Outstanding