Financial Ratios Quiz

Current Ratio: Calculate the ratio of current assets to current liabilities to understand the company's short-term liquidity.

• 2.6

• 1.6

• 3.0

• 2.0

Quick Ratio: Determine the ratio that assesses the company's ability to meet short-term obligations without relying on inventory.

• 1.2

• 1.8

• 2.0

• 1.6

Gross Profit Margin: Find the percentage of sales that results in gross profit, indicating the profitability of core operations.

• 35%

• 40%

• 45%

• 50%

Operating Profit Margin: Calculate the percentage of sales that results in operating income.

• 22%

• 26%

• 24%

• 20%

Net Profit Margin: Identify the percentage of sales that translates into net income after all expenses.

• 12.5%

• 14.0%

• 15.4%

• 13.2%

Debt-to-Equity Ratio: Determine the ratio of total liabilities to total equity, assessing the company's financial leverage.

• 1.2

• 1.33

• 1.5

• 1.1

Equity Ratio: Calculate the ratio that shows what percentage of assets is financed by equity.

• 40%

• 42.9%

• 35%

• 45%

Interest Coverage Ratio: Assess the company's ability to pay interest from operating income.

• 12.0

• 10.0

• 8.5

• 9.0

Inventory Turnover Ratio: Calculate how often inventory is sold and replaced during the year.

• 7.5

• 6.5

• 8.0

• 7.0

Receivables Turnover Ratio: Find the ratio that indicates how quickly the company collects accounts receivable.

• 9

• 10

• 11

• 8