Ratios & Cash Flow Statement

Working Capital formula?

• Current assets-current liabilities

• Current assets-non current liabilities

• stock +prepaid expense

Preferable Current ratio

• 2:1

• 3:2

• 1:4

• 4:1

Proprietary ratio

• Equity/total assets

• total assets/Dept

• equity/dept

• dept/equity

what is the definition of capital employed for public limited companies?

• Equity Capital + Reserves

• Equity capital+ PSC + Reserves

• Equity capital+PSC+Reserves+NCL

• Equity Capital only

The _________ is a measure of liquidity which excludes _______, generally the least liquid asset:

• Current ratio, trade receivable

• Liquid ratio, trade receivable

• Current ratio, inventory

• acid test ratio, inventory

The _________ of business firm is measured by its ability to satisfy its short term obligations as they become due:

• Activity

• Liquidity

• profitability

• Solvency

What Accounting Ratio Category does Debts to Assets Ratio  fall into?

• Profitability

• Liquidity

• Efficency

• Capital Structure

• Inventory turnover

• Debtors turnover

• Inventory cost

• Inventory ratio

Which of the following is not operating expenses?

• (A) Office Expenses

• (B) Selling Expenses

• (C) Bad Debts

• (D) Loss by Fire

Cost of Revenue from Operations =

• (A) Revenue from Operations – Net Profit

• (B) Revenue from Operations – Gross Profit

• (C) Revenue from Operations – Closing Inventory

• (D) Purchases – Closing Inventory