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Unit 14:Understanding Financial Ratios Quiz

Authored by Hank Chang

Business

9th Grade

Unit 14:Understanding Financial Ratios Quiz
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10 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is a liquidity ratio?

Net Profit Margin

Debt-to-Equity

Inventory Turnover

Quick Ratio

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

A Current Ratio below 1.0 typically indicates...

Excess profits

Possible cash flow problems

Excellent debt management

Over-investment in equipment

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What does the Debt-to-Equity ratio measure?

Sales compared to assets

Profit compared to sales

Borrowed funds compared to owner's equity

Inventory levels

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

A high Inventory Turnover ratio usually means...

Slow-moving inventory

Efficient inventory management

Too much inventory

High debt levels

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What does Return on Assets (ROA) indicate?

Value of the company

How efficiently assets produce earnings

Speed of payment collection

Inventory levels

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

If a company has a Debt Ratio of 0.9, what does it suggest?

The company is not profitable

Most assets are financed by debt

Inventory is too high

It has a good net income

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is considered a “good” Current Ratio in most industries?

0.5

1.0

1.5 to 3.0

5.0

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