
Ratio Analysis
Quiz
•
Professional Development
•
University
•
Practice Problem
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Medium
Iman Putri
Used 1+ times
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10 questions
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1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Ali has been asked to make a loan of $30,000 to Mudessar’s business. Ali has the money and is keen to earn more interest on his cash than he currently does.
Which TWO of the following areas of Mudessar’s financial statements should Ali consider before lending to Mudessar
Amount of existing debt
Capital
GP percentage
Net profit percentage
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Accounting ratios are most useful when each calculation is analysed separately
True
False
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Lenders are most concerned with gearing and liquidity ratios.
True
False
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Investors can use ratios to compare businesses to assess their relative profitability and stability.
True
False
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Management tend to use profitability ratios only
True
False
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following factors could cause a company’s gross profit percentage on sales to fall below the expected level?
1) Overstatement of the opening inventory valuation
2) The incorrect inclusion in purchases of invoices relating to goods received from suppliers in the following period
3) The incorrect inclusion in sales of invoices relating to goods despatched to customers in the following period
4) Increased discounts received from suppliers
1 and 2
1 and 3
2 and 4
3 and 4
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following factors would cause a company’s gearing ratio to fall?
1. 1 for 1 bonus issue of ordinary shares
2. 1 for 2 rights issue of ordinary shares
3. An issue of loan notes
4. An upward revaluation of land and buildings
1 and 2
1 and 3
2 and 4
3 and 4
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