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WorksheetsActivity Ratios
Total questions: 14
Worksheet time: 10mins
The _________ is useful in evaluating credit and collection policies.
A. Average payment period
B. Current ratio
C. Average collection period
The ___________ measures the activity of a firm’s inventory.
A. average collection period
B. inventory turnover
C. liquid ratio
D. current ratio
___________ are especially interested in the average payment period, since it provides them with a sense of the bill-paying patterns of the firm.
A. Customers
B. Shareholders
C. Lenders and suppliers
Cost of goods sold is ___________
Opening inventory +Purchases + Direct Expenses - Closing Stock
Gross Profit - Net sales
Opening inventory +Purchases - Direct Expenses - Closing Stock
Net Sales - cost of good sold
Gross Profit = ____________
Net sales - Gross profit
Net sales -- COGS (Cost of Goods Sold)
Net sales + COGS(Cost of Goods Sold)
Salary is a_________
Indirect Expense
Direct Expense
_________ ratios are a measure of the speed with which various accounts are converted into revenue from operations or cash:
Solvency
Activity
Liquidity
The ___________ measures the activity of a firm’s inventory.
Inventory Turnover
Liquid Ratio
Current Ratio
Cost of Revenue from operations and Revenue from operations are same
True
False
The ___________ measures the activity of a firm’s inventory.
A. average collection period
B. inventory turnover
C. liquid ratio
D. current ratio
The ___________ may indicate that the firm is experiencing stock outs and lost sales.
A. average payment period
B. inventory turnover ratio
C. average collection Period
ABC Co. extends credit terms of 45 days to its customers. Its credit collection would be considered poor if its average collection period was________
A. 30 days
B. 36 days
C. 47 days
D. 37 days
___________ are especially interested in the average payment period, since it provides them with a sense of the bill-paying patterns of the firm.
A. Customers
B. Shareholders
C. Lenders and suppliers
Asset turnover measures
how often a company replaces its assets.
how efficiently a company uses its assets to generate sales.
the portion of the assets that have been financed by creditors.
the overall rate of return on assets.
