Stock Market & Financial Statements MCQs

A company has a stock price of ₹200 and a book value per share of ₹50. What is its Price-to-Book (P/B) ratio?

• 2

• 3

• 4

• 5

Which of the following best describes an Initial Public Offering (IPO)?

• A company issuing shares for the first time to the public

• A company repurchasing its own shares from the market

• A company issuing dividends to existing shareholders

• A company acquiring another company using shares

If a stock has a Price-to-Earnings (P/E) ratio of 25, it means:

• The stock price is 25 times its earnings per share

• The company has a 25% profit margin

• The company earns ₹25 per share

• The stock is overvalued

A company's gross profit is calculated as:

• Revenue - Operating Expenses

• Revenue - Cost of Goods Sold

• Revenue - Net Profit

• Net Profit + Taxes

If you invest ₹1,00,000 in a stock that grows at 15% per annum, approximately how much will you have after 3 years with annual compounding?

• ₹1,45,000

• ₹1,52,000

• ₹1,52,087

• ₹1,60,000

A company reports negative cash flow from investing activities. This generally means:

• The company is making losses

• The company is investing in assets for growth

• The company has high liabilities

• The company is issuing more shares

Which of the following expenses is NOT included in operating expenses on the Profit & Loss statement?

• Employee Salaries

• Rent Expenses

• Interest Paid on Loans

• Advertising Costs

Which of the following is NOT a function of SEBI (Securities and Exchange Board of India)?

• Regulating stock exchanges

• Protecting investor interests

• Setting monetary policy in India

• Monitoring insider trading

If a company has current assets worth ₹5,00,000 and current liabilities worth ₹2,50,000, what is its current ratio?

• 1.5

• 2.0

• 2.5

• 3.0

Which activity is NOT classified under cash flows from operating activities?

• Sale of goods

• Payment to suppliers

• Depreciation expense

• Sale of machinery