AQA - Financial Ratios

Which is the odd one out?

• Payable Days

• Current Ratio

• Receivable Days

• Inventory Turnover

What is the Formula for Gearing?

• Long Term Liabilities/Profit for the Year x 100

• Selling Price x Quantity Sold

• Non-Current Liabilities/Total Equity + Non-Current Liabilities x 100

• Non-Current Liabilities/Capital Employed x 100

What Family of Ratios includes Inventory Turnover?

• Liquidity

• Gearing

• Efficiency

• Profitability

What is Liquidity a Measure of?

• Profit

• Variable Costs

• Ability to Pay Long Term Debts

• Working Capital

What is the Relationship between Payable Days and Receivable Days?

• Businesses want longest possible payable days figure and longest possible receivable days

• Businesses wan shortest possible payable days figure and longest possible receivable days

• Businesses want longest possible payable days figures and shortest possible receivable days

• Businesses want shortest possible payable days figure and shortest possible receivable days

What is the ideal Level for Current Ratio?

• 2.5:1

• 1:1

• 0.5 - 1:1

• 1.5 - 2:1

Which is the correct Formula for the Current Ratio

• Sales Revenue/Current Assets

• Current Assets/Sales Revenue x 100

• Current Assets/Current Liabilities x 100

• Current Assets/Current Liabilities

What is the correct Formula for Payable Days

• Payables/Cost of Sales x 365

• Payables/Sales Revenue x 365

• Payables/Sales Revenue x 100

• Payables/Cost of Sales x 100

At what level is a Business considered Highly Geared?

• 20%

• 30%

• 40%

• 50%

The gross profit ratio is calculated by dividing:

• Profit by sales

• Profit by shareholders’ equity

• Gross profit by sales

• Sales by cost of sales