MANAGEMENT ACCOUNTING QUIZ 2

The current ratio is a measure of a company’s:

• Profitability

• Liquidity

• Leverage

• Market value

The quick ratio excludes which of the following from current assets?

• Cash

• Accounts Receivable

• Inventory

• Marketable Securities

A high debt to equity ratio indicates:

• More reliance on equity financing

• More reliance on debt financing

• Better liquidity

• Better profitability

The Price Earnings (P/E) ratio measures:

• Company’s debt compared to its equity

• Market value per share compared to earnings per share

• Company’s profitability

• Liquidity position

Dividend Yield is calculated as:

• Dividends per Share / Earnings per Share

• Dividends per Share / Market Price per Share

• Dividends per Share / Book Value per Share

• Dividends per Share / Sales per Share

Gross profit ratio is calculated as:

• (Net Sales - Operating Expenses) / Net Sales

• (Net Income - Cost of Goods Sold) / Net Sales

• (Net Sales - Cost of Goods Sold) / Net Sales

• (Net Income - Operating Expenses) / Net Sales

Earnings Per Share (EPS) is an indicator of:

• Liquidity

• Profitability

• Solvency

• Market value

Capital Gearing Ratio is calculated as:

• Fixed Interest Bearing Funds / Equity Shareholders' Funds

• Equity Shareholders' Funds / Fixed Interest Bearing Funds

• Total Assets / Total Liabilities

• Current Assets / Current Liabilities

The Fixed Asset Ratio is calculated as:

• Fixed Assets / Total Assets

• Fixed Assets / Total Liabilities

• Fixed Assets / Net Worth

• Fixed Assets / Long term fund

The Interest Coverage Ratio is a measure of:

• Profitability

• Liquidity

• Solvency

• Efficiency