Font size
WorksheetsRatio Analysis
Total questions: 57
Worksheet time: 31mins
It measures the ability of the business to pay its current trade payables.
Solvency
Liquidity
Activity
Compute for the company's working capital.
Current Assets = P 30, 000
Current Liabilities = P 15, 000
P 45, 000
P 10, 000
P 15, 000
The financial statement that reports whether the business earned a profit and also lists the revenues and expenses is called the:
Balance Sheet
Statement of Retained Earnings
Statement of Cash Flows
Statement of Profit or Loss
The Statement of Profit or Loss can be expressed as an equation:
Income =Income-Expenses
Revenue-Expenses = Net Profit/Loss
Revenue + Expenses = Net Profit/Loss
Expenses = Net Income + Revenue
This document communicates what the entity owns in terms of assets, what it owes in the terms of liabilities, and the difference between those two which represents what the owners o the company are entitled to.
Income Statement
Statement of Financial Position
Statement of Cash Flows
Balance Statement
Assets = Liabilities + Equity
Statement of Financial Position
Income Statement
What a company owes to creditors:
Assets
Liabilitites
Equity
The gross profit 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 ratio
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
How do you calculate the Net Profit Ratio?
Net Profit divided by Net Sales x 100
Net Sales divided by Net Profit x 100
What does the Net Profit Ratio show us?
How much money the business has spent
How much money the business owes
The percentage of profit in each sale
The percentage of assets in each account
If you business NPR is 40% and the Industry average is 58%, does your business have a....
Favourable Net Profit Ratio
Unfavourable Net Profit Ratio
Calculate the Current Ratio for this business based on the data given
0.83:1
83%
0.88:1
75%
A business has a current ratio of 2.5, current assets of £4.5million and inventories of £1.5million. What are the current liabilities of the business?
£0.25m
£0.6m
£1.2m
£1.8m
Current Ratio
Current Assets - Current Liabilities
Current Assets + Current Liabilities
Current Assets / Current Liabilities
Current Assets / Total Assets
Capital and Equity mean the same thing
True
False
The sources of money generated by the sale of products or services.
Revenue
Expenses
Net Income
Net Loss
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
Financial ratios that tell how well a company can pay off its short-term debts and meet unexpected needs for cash.
liquidity ratios
efficiency ratios
leverage ratios
profitability ratios
All well-managed companies maintain a 2:1 current ratio.
TRUE
FALSE
Gross Profit = ________
Net sales + Cost of goods sold
Net sales - Cost of goods sold
Financial analysis is used only by the creditors.
True
False
The missing term =
net profit (for the year)
finance costs
operating profit
current liabilities
Cost of goods sold = £ (a)
Gross profit margin = (a) %
Operating profit margin =
26 %
48 %
52 %
62 %
Which line is the green arrow pointing to ?
fixed costs line
total revenue line
total costs line
margin of safety = 1500
margin of safety = 900
margin of safety = 600
margin of safety = 300
Profit area is shaded :
yellow
green
red
Which parts of the accounts would you use when calculating the current ratio ?
A and C
B and C
A and D
B and D
The current ratio (and the acid test ratio) are used to assess : L (a) (one word)
What information do you need for the Current Ratio?
Current Assets
Current Liabilities
Total Assets
Total Liabilities
