Obe Chris

Which of the following ratios is used to measure a company's ability to meet its short-term obligations without relying on the sale of inventory?

• Current Ratio

• Quick Ratio

• Debt to Equity Ratio

• Gross Profit Margin

If a company has a high inventory turnover ratio, what does this typically indicate about its inventory management?

• The company is holding too much inventory

• The company is efficiently managing its inventory

• The company has low sales

• The company is not profitable

Which ratio is used to evaluate a company's profitability relative to its shareholders' equity?

• Return on Assets

• Return on Equity

• Current Ratio

• Price to Earnings Ratio

A company has a current ratio of 0.8. What does this suggest about the company's financial health?

• The company has more liabilities than assets

• The company has more assets than liabilities

• The company is highly profitable

• The company has high liquidity

Which of the following is considered a market ratio?

• Earnings Per Share

• Quick Ratio

• Net Profit Margin

• Asset Turnover Ratio

What does a low price to earnings (P/E) ratio suggest about a company's stock?

• The stock is overvalued

• The stock is undervalued

• The company is highly profitable

• The company has high liquidity

Which of the following is an efficiency ratio?

• Debt to Equity Ratio

• Inventory Turnover Ratio

• Current Ratio

• Gross Profit Margin

A company has a return on assets (ROA) of 5% and a return on equity (ROE) of 15%. What does this indicate about the company's use of financial leverage?

• The company is not using financial leverage effectively

• The company is using financial leverage effectively

• The company has poor liquidity

• The company has high market value

Which ratio would you use to assess a company's ability to generate profit from its sales?

• Net Profit Margin

• Current Ratio

• Debt to Asset Ratio

• Price to Book Ratio

What does a high debt to equity ratio indicate about a company's financial structure?

• The company is highly leveraged

• The company has high liquidity

• The company is highly efficient

• The company is highly profitable