Managerial Finance Quiz

What is the primary purpose of managerial finance?

• Minimising tax liability

• Preparing audit reports

• Supporting strategic decision-making using financial data

• Marketing financial products

Which of the following is not a primary financial document used in decision-making?

• Income Statement

• Balance Sheet

• Marketing Strategy Plan

• Cash Flow Statement

The Balance Sheet shows a company’s:

• Revenue over a period

• Financial position at a specific point in time

• Cash inflow and outflow

• Product profitability

What is the main purpose of an Income Statement?

• To report assets and liabilities

• To calculate the company’s stock value

• To determine net profit or loss over a period

• To show future sales projections

Which of the following is included in the Cash Flow Statement?

• Net Sales

• Accounts Receivable

• Depreciation

• Operating Activities

Which ratio best measures a company’s ability to meet short-term obligations?

• Gross Profit Margin

• Return on Equity

• Current Ratio

• Debt to Equity Ratio

A high inventory turnover ratio suggests:

• Overstocking

• Poor sales

• Efficient inventory management

• Cash flow problems

What does the Return on Capital Employed (ROCE) ratio evaluate?

• Debt level

• Profitability relative to capital used

• Liquidity position

• Earnings per share

At the break-even point:

• Total revenue = Total cost

• Profit is maximised

• Fixed costs are zero

• Variable costs are more than revenue

The formula for Contribution per unit is:

• Sales – Fixed Costs

• Sales – Variable Costs

• Profit / Units Sold

• Gross Margin / Total Sales