Financial Statement and Ratio Quiz

Net Working Capital is the ______.

• Capital borrowed from the Banks.

• Difference between Current Assets and Current Liabilities.

• Difference between Current Assets and Fixed Assets.

• Cash and Bank Balance.

• None of the Above

Current Ratio is equal to Current Assets divided by ______.

• Current Liabilities.

• Total Liabilities.

• Contingent Liabilities.

• Non-Current Liabilities.

• None of the Above

Which of the following transactions will improve the Current Ratio?

• Purchase of Goods for Cash.

• Payment to Trade Payables by raising capital.

• Credit purchase of Goods.

• Cash collected from Trade Receivables.

• None of the Above

The ______ is a measure of liquidity that excludes generally the least liquid current asset ____.

• Liquid ratio, Accounts receivable.

• Current ratio, inventory.

• Quick ratio, inventory.

• Current ratio, Accounts receivable.

• None of the Above

Two basic measures of liquidity are _____.

• Current ratio and Quick ratio.

• Gross Profit ratio and Operating ratio.

• Current ratio and Average collection period.

• Inventory turnover and Current ratio.

• None of the Above

The ________ of a business firm is measured by its ability to satisfy its short-term obligations as they become due.

• Liquidity

• Debt

• Profitability

• Activity

• None of the Above

Inventory Turnover Ratio is a relationship between ______.

• Cost of goods purchased and cost of average inventory.

• Cost of goods sold and cost of average inventory, and cost of goods purchased and cost of average inventory.

• Cost of goods sold and cost of average inventory.

• None of the options is correct.

• All are correct

Debt to equity ratio establishes the relationship between ______.

• Long-term debt and current assets.

• Long-term debt and equity, and long-term debt and current assets.

• Long-term debt and equity.

• Short Term Debt to Equity

• None of the options are correct.

Equity or Shareholders fund is equal to _____.

• Equity share capital + Preference share capital.

• Equity share capital + Reserves and Surplus.

• Equity share capital + Preference share capital + Reserves and Surplus.

• Equity share capital + Reserves and Surplus + Long Term Debt

• None of the options are correct.

Total Outside Liability means

• Capital + Long Term Liability

• Long Term Liability + Short Term Liability

• Capital + Short Term Liability

• Capital + Short Term Liability + Long Term Liability

• None of the above