Financial Ratios Quiz Lesson 25

What can financial ratios help determine about a company?

• Its color scheme

• Its financial health

• Its employee count

• Its location

What is the formula for the quick ratio?

• (Current Assets - Inventory) / Current Liabilities

• Current Assets / Current Liabilities

• Current Liabilities / (Current Assets - Inventory)

• Inventory / Current Liabilities

What does a higher Net Profit Margin percentage mean for a company?

• The company is spending more on expenses

• The company is keeping more of its sales as profit

• The company is losing money

• The company has more employees

Which formula is used to calculate Return on Assets (ROA)?

• Net Income / Revenue

• Net Income / Total Assets

• Total Assets / Net Income

• Revenue / Total Assets

What does a Debt-to-Equity Ratio less than 1 indicate?

• The company has more debt than equity

• The company has more equity than debt

• The company is highly profitable

• The company has a strong market position

What is the formula for calculating the P/E Ratio?

• Net Income / Shares Outstanding

• Stock Price / Earnings Per Share

• Total Revenue / Net Income

• Earnings Per Share / Stock Price

Why is EPS useful?

• It helps compare companies in different industries

• It shows the total revenue of a company

• It helps compare companies in the same industry

• It indicates the number of shares outstanding

Which financial metric is used to assess how much investors are willing to pay for a company's stock?

• Earnings Per Share

• Price-to-Earnings Ratio

• Net Income

• Total Revenue

What does the P/E Ratio compare?

• Stock Price to Net Income

• Stock Price to Earnings Per Share

• Net Income to Shares Outstanding

• Total Revenue to Net Income

Which of the following is a key concept of market ratios?

• Total Revenue

• Net Income

• Price-to-Earnings Ratio

• Debt Levels