Activity 3 - MEASURING FINANCIAL PERFORMANCE

Which formula correctly represents the Gross Profit Percentage?

What does EBIT stand for in financial analysis?

• Earnings Before Interest and Taxes

• Earnings Before Income and Taxes

• Earnings Before Investment and Taxes

• Earnings Before Interest and Turnover

How is the EBIT Margin Percentage calculated?

Which formula is used to calculate the Current Ratio?

What does a high Inventory Turnover ratio indicate?

• Inventory is being sold quickly

• Inventory is not selling

• Company has too much inventory

• Company is not purchasing enough inventory

How is Inventory Turnover calculated?

Which formula represents Fixed Asset Turnover?

What does the Expense Ratio measure?

• The proportion of operating expenses to net sales

• The proportion of net income to total assets

• The proportion of gross profit to net sales

• The proportion of current assets to current liabilities

Which of the following is a financial ratio?

• Debt to Equity Ratio

• Inventory Turnover

• Age of Inventory

• All of the above

What is the formula for the Quick Ratio?