Financial Ratios Quiz

In which line of business would you expect the Inventory Turnover ratio to be higher?

• Supermarket

• Construction supplies

• Appliances

• Clothes and Accessories

What consequence will you expect if the inventory days are reduced from 78 to 64?

• profitability of the business will improve

• Liquidity of the business will improve

• Operational efficiency of the business will improve

• no consequence

Sales in the year ending 31st March 2012 were P43,200. Identify the gross profit ratio, as a percentage, if gross profit for the year was P5,400

• 7%

• 12.5%

• 20%

• 25.7%

Which formula is defined by Current assets DIVIDED BY current liabilities?

• Current Ratio

• Debt Ratio

• Net Worth Ratio

• Working Capital

Which inventory turnover ratio is favorable to a company?

• 2.4

• 2.75

• 3.24

• 3.79

It narrates the connection between the numbers presented in the financial statement.

• Financial Ratio Analysis

• Horizontal analysis

• Trend Analysis

• Vertical Analysis

Which is a Profitability Ratio?

• Inventory Turnover

• Debt to Equity Ratio

• Average Sales Period

• Return on Assets

Which is a Liquidity Ratio?

• Inventory Turnover

• Debt to Equity Ratio

• Profit Margin

• Return on Assets

Looking at the items below: Amount Cash P410,000 Accounts Receivables 120,000 Merchandise Inventory 235,000 Property, Plant and Equipment 455,000 Accounts Payables 265,000 * Compute the Current Ratio

• 1.5

• 2

• 2.9

• 9.4

Which of the following is unfavorable to the company’s Debt ratio?

• 64%

• 53%

• 24%

• 15%