
MCQ TEST RATIO ANALYSIS
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Business
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University
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Practice Problem
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Hard
Heba fathma
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15 questions
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1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
1. In the Current Ratio formula , what is on the numerator?
Current Liabilities
Current Assets
Fixed Assets
Working Capital
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of these is a liquidity ratio?
a) Debt-to-Equity Ratio
b) Current Ratio
c) Return on Capital Employed
d) Inventory Turnover Ratio
Answer explanation
The liquidity ratio is like the financial “water bottle test” for a business — it checks if the company has enough “liquid” (short-term assets) to quench its short-term “thirst” (liabilities).
Too low? The business might be parched. Too high? It might be hoarding cash instead of investing it to grow.
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
The formula for Debt-to-Equity Ratio has which item in the denominator?
Shareholders’ Equity
Long-term Debt
Total Assets
Working Capital
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
In the Quick Ratio formula, which asset is excluded from Current Assets?
Cash
Inventory
Debtors
Marketable securities
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following is a solvency ratio?
Quick Ratio
Debt-to-Equity Ratio
Current Ratio
Gross Profit Ratio
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
The Inventory Turnover Ratio is calculated as
Cost of Goods Sold ÷ Average Inventory
Sales ÷ Current Assets
Sales ÷ Fixed Assets
Operating Profit ÷ Average Inventory
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
If the Current Ratio is 2:1, which of the following can be a possible set of values?
Current Assets ₹1,00,000; Current Liabilities ₹50,000
Current Assets ₹80,000; Current Liabilities ₹1,00,000
Current Assets ₹1,00,000; Current Liabilities ₹1,00,000
Current Assets ₹50,000; Current Liabilities ₹1,00,000
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