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FINANCIAL RATIOS

Total questions: 14

Worksheet time: 10mins

Name
Class
Date
1.
A comparison between two numbers showing how many times one number exceeds the other.
a)
return on investment
b)
profitability ratios
c)
ratio
d)
efficiency ratios
2.
Financial ratios that tell how well a company can pay off its short-term debts and meet unexpected needs for cash.
a)
liquidity ratios
b)
efficiency ratios
c)
leverage ratios
d)
profitability ratios
3.
Financial ratios that indicate how effectively a company uses its resources to generate sales.
a)
liquidity ratios
b)
leverage ratios
c)
profitability ratios
d)
efficiency ratios
4.
Financial ratios that show how and to what degree a company has financed its assets.
a)
leverage ratios
b)
liquidity ratios
c)
efficiency ratios
d)
profitability ratios
5.
Financial ratios that tell how much of each dollar of sales, assets, and owner's investments resulted in net profit.
a)
liquidity ratios
b)
efficiency ratios
c)
profitability ratios
d)
leverage ratios
6.
The difference between current assets and current liabilities at a point in time. The amount of money that would be left over if all the current liabilities were paid off by current assets. 
a)
current ratio
b)
working capital
c)
acid test/ quick ratio
d)
asset turnover ratio
7.
The comparison of a firm's current assets to current liabilities. The ratio indicates the amount of current assets available to pay off $1 of current debt.
a)
acid test/ quick ratio
b)
asset turnover ratio
c)
current ratio
d)
inventory turnover
8.
Indicates a firm's ability to quickly liquidate assets to pay off current debts.
a)
asset turnover ratio
b)
inventory turnover
c)
debt-to-assets ratio
d)
acid test/ quick ratio
9.
Indicates the number of dollars in sales the firm generates from each dollar it has invested in assets. 
a)
asset turnover ratio
b)
acid test/ quick ratio
c)
debt-to-assets ratio
d)
debt-to-equity ratio
10.
The number of times during an operating period that the average inventory was sold.
a)
working capital
b)
return on investment
c)
inventory turnover
d)
debt-to-assets ratio
11.
Indicates how quickly a firm's credit accounts are being collected and is a good measure of how efficiently a firm is managing its accounts receivable.
a)
average collection period
b)
efficiency ratios
c)
working capital
d)
current ratio
12.
Measures to what degree the assets of the firm have been financed with borrowed funds.
a)
debt-to-equity-ratio
b)
liquidity ratio
c)
profitability ratio
d)
debt-to-assets ratio
13.
Compares the total debt of the firm with the owner's equity.
a)
debt-to-assets ratio
b)
debt-to-equity ratio
c)
asset turnover ratio
d)
efficiency ratio
14.
The amount of profit generated by the firm in relation to the amount invested by the owners.
a)
return on investment
b)
ratio
c)
working capital
d)
inventory turnover