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WorksheetsFinancial Statement Analysis (ELS)
Total questions: 40
Worksheet time: 48mins
The gross profit margin ratio is calculated by dividing:
Profit by sales
Profit by shareholders’ equity
Gross profit by sales
Sales by cost of sales
What is the formula for Gross Profit Margin
Profit / Net sales revenue X 100
Gross profit / Net sales revenue X 100
Gross profit / Sales revenue X 100
Profit / Cost of sales X 100
The current ratio is also known as the:
Quick ratio
Working capital ratio
Cash flow ratio
Capital structure ratio
If at year end Cash is $5,460, Accounts Receivable is $3,505, Current Assets are $18,475, and Current Liabilities are $18,860; what is the current ratio?
0.48:1
0.98:1
0.45:1
1.45:1
What does PPE stand for?
Payable, Property, and Equipment
Prepaid, Property, and Expenses
Prepaid, Property, and Equipment
Plant, Property and Equipment
What does a current ratio tell us?
A higher current ratio indicates better liquidity.
A lower current ratio indicates better liquidity
A higher current ratio indicates what portion of assets are tied up in slow moving inventory
A lowercurrent ratio indicates what portion of assets are tied up in slow moving inventory
How do you find Working Capital?
Assets - Liabilities
Current Assets - Owner's Capital
Current Assets - Current Liabilities
Long Term Assets - Long Term Liabilities
What does liquidity mean?
The company's ability to pay its obligations.
The company's ability to collect its receivables.
The company's ability to increase financing
The company's ability to obtain a new loan
Which is not a quick asset?
Cash equivalents
Notes receivable
Inventories
Cash substitutes
NOT IN THE CHOICES
Inventory turnover
Short-term Solvency and Liquidity
Asset Liquidity and Management Efficiency
Long-term Financial Position or Stability
Profitability and Returns to Investors
NOT IN THE CHOICES
Capital intensity ratio
Total capital divided by total assets
Total assets divided by total liabilities
Net sales divided by total capital
Total assets divided by net sales
NOT IN THE CHOICES
Total equity divided by total assets
Equity ratio
Debt ratio
Debt-to-equity ratio
Equity-to-debt ratio
NOT IN THE CHOICES
Net income after taxes divided by net sales
Net profit margin
Net sales margin
Net profit and sales margin
Profit-sales ratio
NOT IN THE CHOICES
If current liabilities are P100,000 and current assets are P200,000, what is the current ratio?
0.50
1.20
1.50
2.00
NOT IN THE CHOICES
Which is not a profitability ratio?
Earnings per share
Dividend yield
Price/earnings ratio
Rate of return on net sales
NOT IN THE CHOICES
Cost of goods sold divided by average inventory
Inventory turnover
Cost of goods sold margin
Inventory margin
Days sales in receivables
NOT IN THE CHOICES
If net sales is P200,000 and cost of sales is P150,000, how much is the gross profit margin in percent?
25.00%
50.00%
75.00%
133.33%
NOT IN THE CHOICES
Rate of return on assets
Short-term Solvency and Liquidity
Asset Liquidity and Management Efficiency
Long-term Financial Position or Stability
Profitability and Returns to Investors
NOT IN THE CHOICES
If total assets are P1,000,000 and total equity is P650,000, how much is the debt ratio?
35.00%
45.00%
55.00%
65.00%
NOT IN THE CHOICES
Which of the following is not a liquidity ratio?
Defensive interval ratio
Cash ratio
Rate of return on equity
Quick ratio
NOT IN THE CHOICES
Below are all the components of financial statements except:
Statement of comprehensive income
Statement of financial position
Statement of debt
Statement of cash flow
If net sales are P1,500,000 and accounts receivable amount to P300,000, how long is the average collection period?
36.00 days
45.00 days
64.00 days
72.00 days
NOT IN THE CHOICES
Competitive ratio is comparing ratio of the firm with the another firm within the same industry.
True
False
How does net loss affect owner's equity?
increases
decreases
no change
indirectly
A more recent issue that is causing major problems in the business community is
the privatization of ownership.
short-term versus long-term financial goals of
management.
ethical problems.
If Nico Corporation has annual purchases of RM300,000 and accounts payable of RM30,000, then average purchases per day are ________ and the average payment period is ________.
36.5; 821.9
36.0; 833.3
821.9; 36.5
833.3; 36.0
The ________ is useful in evaluating credit and collection policies.
average payment period
current ratio
average collection period
current asset turnover
Below are all the advantages of financial ratio except:
Simplifies the comprehension of financial statements
Help in planning and forecasting
Adjusting cost of capital for different risk
Help in investment decision
If Nico Corporation has cost of goods sold of RM300,000 and inventory of RM30,000, then the inventory turnover is ________ and the average age of inventory is ________.
36.5; 10
10; 36.5
36.0; 10
10; 36.0
Look at the question Sheet Attached above and
Calculate for Kehly
1) Debtors Collection Period in Days
2) Liquid ratio
(answer correct to one decimal place)
10.95 , 1.5 : 1
109, 1.5 : 1
109.5, 1.5 : 1
109.5, 1.5 : 1.25
The trade receivables balance is £19,100. A debt of £400 is considered to be irrecoverable and is to be written off. The balance on the allowance for doubtful debts is currently £735 and the allowance is to be revised to 5% of trade receivables. The amount to be charged to the statement of profit or loss for the change in the doubtful debt allowance is:
935
735
200
220
If you want to assess the profitability of a business, which ratio is the most appropriate?
Net profit margin
Return on assets
Return on equity
Return on capital
Look at the data above and calculate ROCE for both 2008, & 2009
23.33 % , and 4.16%
25% and 5%
20% and 3.4%
None of above
from the data given above calculate the Trade Payable Payment Period?
32.01
12.80
64.03
18.25
Look at the data above and calculate the Trade Receivable collection Period?
64.03
32.01
13.68
22.81
Look at the data above and calculate the percentage return on capital employed
105.88 %
69.47%
35.29%
38.82%
Look at the data above and calculate the Liquid (acid test) ratio
3.4 : 1
0.91 : 1
1.09 : 1
none of above
