Free Printable Ratio Analysis

1.

a) Liquidity Ratio explain the liquidity Position of the concern

b) Current ratio express the short term liquidity of the Concern

a)

Both the Statement are Correct

b)

A is Correct but B is Wrong

c)

B is Correct but A is Wrong

d)

Both the Statement are Wrong

2.

Quick Assets= ?

a)

CA- Prepaid expenses

b)

CA- Inventory- Prepaid expenses

c)

CA + Inventory- Prepaid expenses

d)

CA- Inventory + Prepaid expenses

3.

In calculating Interest Coverage Ratio, Interest Includes

a)

Interest on Short term & Long term Loans

b)

Interest on Short term Loans

c)

Interest on Short term & Long term Debts

d)

Interest on Long term Debts

4.

If Revenue from Operations is ? 1,60,000 and Gross Profit is 40,000, Gross Profit Ratio will be

a)

20%

b)

25%

c)

30%

d)

40%

5.

Which of the following transaction will result in an increase in current ratio:

a)

Goods costing $1000 sold on credit for $900

b)

Goods costing $1000 sold on cash for $900

c)

Goods costing $1000 sold in cash for $1100

d)

None of these

6.

Identify the wrong statement

a)

Capital employed= Share holder fund+ Long term Debt- Non trade investment

b)

Share holder fund= Share capital + reserve & Surplus- Fictitious assets

c)

Quick assets is also Known as liquid assets

d)

Net worth is the other name of Capital Employed

7.

Standard Current Ratio

a)

1:1

b)

2:1

c)

1:2

d)

2:2

8.

Efficiency ratios highlights:

a)

How well assets and liabilities are managed

b)

Measures how quickly assets can be converted to cash

c)

Share of ownership in a company

d)

A comparison of two amounts

9.

These are the quick assets.

a)

Cash and Cash E

b)

Cash, Accts Receivables, Short term Investments

c)

Cash, Accts Receivables,

10.

RECEIVABLE TURNOVER

a)

$\frac{\text{Net Credit Sales}}{\text{Average Receivables}}$

b)

$\frac{\text{Average Receivables}}{\text{Average Daily Credit Sales}}$

c)

$\frac{\text{365 days}}{\text{Receivables Turnover}}$

d)

$\frac{\text{Cash Sales}}{\text{Receivables}}$

11.

$\frac{\text{COGs}}{\text{Average Merchandise Inventory}}$

a)

Average Age of Inventory

b)

COGs Turnover

c)

Average Daily Cost of Goods sold

d)

Inventory Turnover

12.

Which is not a quick asset?

a)

Cash equivalents

b)

Notes receivable

c)

Inventories

d)

Cash substitutes

e)

NOT IN THE CHOICES

13.

Net income after taxes divided by net sales

a)

Net profit margin

b)

Net sales margin

c)

Net profit and sales margin

d)

Profit-sales ratio

e)

NOT IN THE CHOICES

14.

If current liabilities are P100,000 and current assets are P200,000, what is the current ratio?

a)

0.50

b)

1.20

c)

1.50

d)

2.00

e)

NOT IN THE CHOICES

15.

If a long collection period ratio (Accounts receivable ÷ sales X 365) is high, what are the meaning?

a)

A. The Supplier is offering extended payment terms

b)

B. There are no problems with customers paying on time

16.

A financial institution contemplating giving a loan to an entity would be most interested in

a)

the entity’s ability to generate cash flows.

b)

an entity’s ability to generate profits.

c)

an entity’s ability to pay its employees.

d)

an entity’s ability to pay its suppliers.

17.

Delta Pty Ltd has the following balance sheet figures. The debt to equity ratio is:

Current assets $300,000

Current liabilities $200,000

Non-current assets $650,000

Non-current liabilities $150,000

a)

58.3%

b)

36.8%

c)

23.1%

d)

80.0%

18.

If the market share price is $20 and the earnings per share is calculated to be $2.50, the price earnings ratio is:

a)

4 times

b)

5 times

c)

8 times

d)

12.5 times

19.

Which of the following statements regarding days inventory is INCORRECT?

a)

It is a measure of the average length of time it takes to sell inventory.

b)

It is a measure of the efficiency of an entity at selling inventory.

c)

Days inventory is much higher for a supermarket than a clothing retailer.

d)

All of the above options are incorrect.

20.

Limitations of ratio analysis can be caused by:

a)

purchasing expensive machinery at the end of the financial year.

b)

estimations of employee benefits.

c)

different depreciation methods adopted by entities in the same industry.

d)

all of the above.

Ratio Analysis

Total questions: 20

Worksheet time: 40mins

Similar Resources on Wayground