WorksheetsRatios
Total questions: 15
Worksheet time: 15mins
Which of the following is NOT a category of financial ratios?
Profitability ratios
Liquidity ratios
Effectiveness ratios
Solvency ratios
Which of the following ratios DO NOT belong under the Profitability category?
Net profit margin
Current ratio
Return on capital employed
Asset turnover
How to calculate the "Capital Employed" figure?
Share capital + Reserves + Borrowings
Share Capital + Total liabilities
Current liabilities + Non-current liabilities
Assets + Liabilities
Given that Net Profit Margin has improved by 10%. Which of the following is a possible reason?
Lack of demand from customers
Production cost has increased
Aggressive marketing promotion
Increased competition
With a Current Ratio of 2:1, what does this mean?
The company is less liquid
The company cannot meet its short-term commitments
The company's current liabilities is higher than its current assets
The company has a surplus of current assets over current liabilities
Inventory Turnover (days) has decreased from 30 to 25 days. What does this mean?
The company is selling its inventories faster
It takes longer for the company to sell its inventories
The company purchased too much inventories
The company is unable to quickly turn its inventory into sales
Receivables Collection Period (days) has increased from 10 to 20 days. What does this mean?
There is a reduced risk of bad debts
The liquidity of the company has improved
The company is inefficient in collecting its debts
The company has a good credit policy
A company's Gearing Ratio has increased from 6% to 16%. What does this mean?
The company is less risky
The company has a high degree of leverage
The company is mainly financed by equity
Indicates the company is in good financial condition
What does a HIGH price/earnings ratio mean?
Investors are not willing to pay a high price for the shares
Investors expect lower earnings in the future
Indicates strong shareholder confidence
The investment is currently undervalued
Which of the following is NOT a limitation of ratio analysis?
Ratios are based on historical costs
Used to evaluate the performance of a company
Non-financial data are not presented
Different accounting policies and treatments
Given that:
1) Current assets = RM80,000
2) Inventories = RM12,000
3) Current liabilities = RM25,000
What is the current ratio?
2.72 times
3.68 times
2.2 times
3.2 times
Given that:
1) Net profit = RM31,000
2) Finance cost = RM6,000
3) Share capital = RM72,000
4) Loan = RM14,000
What is the Return on Capital Employed (ROCE)?
36.05%
29.07%
43.02%
51.39%
Given that:
1) Sales = RM282,000
2) Cost of sales = RM146,000
3) Trade Receivables = RM67,000
4) Trade Payables = RM34,000
What is the Receivables Collection Period (days)?
87 days
180 days
85 days
44 days
Given that:
1) Equity = RM352,000
2) Non-current liabilities = RM128,000
3) Current liabilities = RM97,000
4) Assets = RM239,000
What is the Gearing Ratio?
56.89%
26.67%
73.33%
27.56%
Given that:
1) Profit after tax = RM45,000
2) No. of shares = 100,000 units
3) Market price per share = RM1
4) Dividend per share = RM0.25
What is the Price Earnings ratio (P/E)?
0.45 times
1.8 times
2.22 times
4 times
