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Worksheets12 Accounting EA ratios
Total questions: 15
Worksheet time: 11mins
Name
Class
Date
1.
Which of the following ratios is not a profitability ratio
a)
A) turnover of accounts receivable
b)
B) return on total assets
c)
C) net profit ratio
d)
D) gross profit ratio
2.
The ratio that would measure the percentage of assets or funds provided by the owner would be
a)
A) equity ratio
b)
B) quick ratio
c)
C) current ratio
d)
D) debt ratio
3.
Two ratios that are mirror of each other are
a)
A) debt ratio and equity ratio
b)
B) current ratio and quick ratio
c)
C) turnover of accounts receivable and turnover of accounts payable
d)
D) return on total assets and return on equity
4.
Gross Profit Ratio
a)
A) Gross profit / Average sales
b)
B) Gross profit / Net sales
c)
C) Net profit / Net sales
d)
D) Net sales/ gross profit
5.
The ratio that, according to a 'rule of thumb' should be about 2:1 is the
a)
A) current ratio
b)
B) quick ratio
c)
C) equity ratio
d)
D) debt ratio
6.
Which of the following ratios is a liquidity ratio
a)
A) turnover of accounts receivable
b)
B) debt ratio
c)
C) return on total assets ratio
d)
D) net profit ratio
7.
A GP ratio result of 43.2% could be expressed as
a)
A) gross profit is 4.32 cents in every dollar of sales
b)
B) gross profit is 4.32 cents in every dollar of net sales
c)
C) gross profit is 43.2 cents in every dollar of sales
d)
D) gross profit is 43.2 cents in every dollar of net sales
8.
The ratio that will measure how much profit the total investment in assets has generated is
a)
A) net profit + interest revenue / average total assets
b)
B) net profit + interest expense / average total assets
c)
C) owner's equity / average total assets
d)
D) net profit / average owner's equity
9.
Which ratio is not a stability ratio
a)
A) return on total assets ratio
b)
B) debt to equity ratio
c)
C) debt ratio
d)
D) equity ratio
10.
The quick asset ratio can also be calculated as
a)
A) near cash assets + receivables / current liabilities
b)
B) current assets / current liabilities
c)
C) cash + near cash assets + receivables / current liabilities
d)
D) cash + near cash receivables / current liabilities
11.
If the gross profit ratio is known then the following can also be calculated
a)
A) the cost of goods sold as a proportion of each dollar of sales
b)
B) the cost of goods sold
c)
C) percentage of inventory adjustment
d)
D) the net profit less the gross profit
12.
The ratio that measures how quickly inventory is sold
a)
A) cost of goods sold / average inventories
b)
B) cost of goods sold/ net credit sales
c)
C) total inventories / average cost of goods sold
d)
D) net profit / net sales of inventories
13.
Choose the best otion: In this ratio, return on total assets, the interest on borrowing is added back to the net profit because
a)
A) assets generate revenue
b)
B) the return on total assets can be assessed without concern about how the assets were funded (through debt or equity)
c)
C) interest was deducted from the net profit
d)
D) interest is not an asset
14.
Which ratio would tell the business whether or not it had too much debt
a)
A) return on equity ratio
b)
B) quick ratio
c)
C) equity ratio
d)
D) current ratio
15.
Return on investment ratio is a
a)
A) profitability ratio
b)
B) stability ratio
c)
C) liquidity ratio
d)
D) yield ratio
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