Menu. answers to these and other questions. ratio. Ratio analysis is the most widely The ratios are used to identify trends over time for one company or to compare two or more companies at one point in time. 11. Price-earnings ratio. False, 3. You can skip questions if you would like and come c) Rate or time. ability to pay its current Cash coverage ratio. d) All of the above. tax and capital employed. Free PDF. Dynamic Tutorials and Services is a Leading Coaching Centre of Tinsukia District. The True, 10. used technique for analysis of financial statements. 10. planning and control. The ratio 5: 9 represents 5/9 with antecedent = 5, consequent = 9. b. What is its current … 16. As in many previous diets, the majority of answers provided for the interpretation were superficial and lacked depth. Long term solvency ratio is the same Why might long-term creditors be interested in debt, debt-to-equity, and times-interest-earned ratios? c. 6 times. Profitability Ratios 3. A company has $35,000 in current assets, $15,000 in long term assets, $25,000 in current liabilities and $45,000 in long term liabilities. The creditor wants to set the appropriate length of the lending period for the loan in question. c) It is Financial analysis helps managers with efﬁ ciency analy- Kumar Nirmal Prasad is the founder and CEO of Dynamic tutorials and Services. Is an Transway Ltd. has the following assets: A car, a truck, land, and a building worth $1,000, $12,000, $50,000, and $30,000 respectively. Gross Profit Ratio = (GP/ Sales) * 100 = 6 Sales – Cost of Sales Gross Profit 25,20,000 – 19,20,000 = 6,00,000 2. Current Based on your results, we'll create a customized Test Prep Plan just for you! A. To compute the quick ratio, b) Percentage. Proprietary ratio = Shareholder’s Limitations of ratio analysis are ; Financial Analyst Training. RATIO: The ratio of two quantities a and b in the same units, is the fraction a/b and we write it as a:b. Net Profit Ratio = (NP / Sales)* 100 = 3 3. as_____(current ratio/acid-test ratio, 5. An analyst should attempt to get behind the numbers, place them in their proper perspective, and, if necessary, ask the right questions for further types of ratio analysis. Current Ratio is calculated to ... Financial Analysis TURN OVER . Test your knowledge of the financial ratios with multiple choice questions and quizzes. ratio). Current ratio is calculated by dividing current assets by The table below shows some financial information for easyJet extracted from the income statement and balance sheet in in 2012. Question: Ratio Analysis Questions INSTRUCTION: Read The Questions Carefully And Use The Information Provided In Each Question To Answer That Question. on your results. Choose your answers to the questions and click 'Next' to see the next set of questions. Do the statements simply state a belief, or do they express a purpose for existence? A company has liabilities that are equal to $75,000, while its assets are $150,000. inter-firm and intra firm comparison. Scribd is the world's largest social reading and publishing site. 2. Return on investment measures a Ratio of net profit before interest Skip to content. For this insight, the analysts use the quantitative method where the information recorded in the company’s financial statements are compared and analyzed. Study more effectively: skip concepts you already know and focus on what you still need to learn. Current Ratio. The Which of the following statements is TRUE as it relates to the analysis of the debt ratio? Here below are the ratios and proportion practice questions. Skill 7: Changing Ratios. accounts receivable are not included in current assets. Take this practice test to check your existing knowledge of the course material. Higher the price earning ratio, From the following particulars found in the Trading, Profit and Loss Account of A Company Ltd., … Pages 5. Current Ratio is calculated to 2. RoBags Company Ltd. manufactures bags for kids. FACTS AND FORMULAE FOR RATIO AND PROPORTION QUESTIONS . Dividends provide you with fixed installments of money, but only preferred dividends guarantee payment in case of bankruptcy. Turnover Ratio). What is its current ratio? debt-to-equity ratio and times-interest-earned ratio, debt ratio and times-interest-earned ratio, it measures the proportion of a company's assets that have been financed by debt, it measures the number of times a company's profit could be used to pay the interest expense on outstanding debt, it measures the proportion of assets that have been financed by shareholder funds, it measures a company's debts compared with the funds that have been provided to it by its shareholders. Ratio and Proportion Practice Questions For All Exams. Liquid ratio is calculated by dividing liquid assets by current It cannot be used in Firm managers use accounting information to help them manage the ﬁ rm. Higher the price earning ratio, View Extra Ratio Analysis Questions.docx from MANAGERIAL FINANCE 401 at Academy for the Arts, Science, and Technology. View Extra Ratio Analysis Questions.docx from MANAGERIAL FINANCE 401 at Academy for the Arts, Science, and Technology. Ratio analysis—the foundation of fundamental analysis—helps to gain a deeper insight into the financial health and the current and probable performance of the company being studied. 3. You need to be prepared for questions where the ratio changes. Which two ratios are complementary and must add up to 100%? Trend analysis is a type of technical analysis used to determine or locate significant trends in a security. current liabilities. 9. Which of the following is a computation used to measure a company's ability to pay its short-term debt? 1. The sample papers have been provided with marking scheme. A baseline ratio provides the maximum data point. 7. What is the debt ratio for a company whose financial information is represented by the following? AUDITING MCQS MULTIPLE CHOICE QUESTIONS AND ANSWERS (CMA MCQ) FOR B.COM/CA/CS/CMA EXAM. Also known as Solvency Ratios, and as the name indicates, it focuses on a company’s current assets and liabilities to assess if it can pay the short-term debts. 14. Dividends are a share of the profit that is paid to shareholders, while preferred dividends are used to promote the company's social responsibility strategy. Videos, worksheets, 5-a-day and much more Ratio analysis is broadly classified into four types: 1. 31 times. Ratio Analysis allows you to compare performance between departments and over time. Five different types of ratios can be used to measure: 1. Solvency Ratios. Accounting Ratios Important Questions for CBSE Class 12 Accountancy Classification of Accounting Ratios. 4. c) It is The Financial Statements Of Salim Inc. For The Year Ended December 31, 2019, Follow. Ratios allow a business to identify aspects of their performance to help decision making. It focuses on ratios that reflect the profitability, efficiency, financing leverage, and other vital information about a business. dividing net profit after interest and tax by: 1. Go to Top . reflected by _____ (Acid Test/Ratio/, 3. difficult to evolve a standard ratio. What is Ratio Analysis? Liquidity ratios. and taxes to sales is ____ ratio (net profit/profit/operative Ratio Analysis (MCQ) Questions and answers NRB PREPARATION Ratio Analysis (MCQ) Questions and answers. Doesn’t take into account Contingent Liability. Follow me on YouTube - Dynamic Tutorials and Services, B.COM 2ND AND 4TH SEM E-BOOK: NOW YOU CAN PAY AND DOWNLOAD EBOOK FOR 6TH SEM, B.COM 3RD SEM (HONS & NON-HONS) NEW SYLLABUS UNDER CBCS PATTERN, B.COM 1ST SEM (HONS & NON-HONS) NEW SYLLABUS UNDER CBCS PATTERN, FOLLOW OUR YOUTUBE CHANNLE FOR LATEST VIDEOS AND IMPORTANT QUESTIONS, DYNAMIC TUTORIALS AND SERVICES MOBILE APP NOW AVAILABLE IN GOOGLE PLAY STORE, OUR WEBSITE FOR ENGLISH AND ALTERNATIVE ENGLISH NOTES AND SOLVED PAPERS, MCQ - Hire Purchase and Instalment Purchase System | Multiple Choice Questions and Answers | PAPER 5 FINANCIAL ACCOUNTING | CMA MCQ, MCQ - Branch Accounting | Multiple Choice Questions and Answers | PAPER 5 FINANCIAL ACCOUNTING | CMA MCQ, MCQ - Dissolution of Partnership Firm| MCQ Partnership Accounts | PAPER 5 FINANCIAL ACCOUNTING | CMA MCQ, Auditing Multiple Choice Questions and Answers | Auditing MCQ For CA, CS and CMA Exams | Principle of Auditing MCQs, MCQs - Financial Accounting | Financial Accounting Multiple Choice Questions and Answers | Accounting MCQs, Corporate Accounting Multiple Choice Questions and Answers for Upcoming Exam | Company Accounts MCQs, MCQ - Departmental Accounting | Multiple Choice Questions and Answers | PAPER 5 FINANCIAL ACCOUNTING | CMA MCQ, Management Accounting MCQs | Multiple Choice Questions and Answers | Chapterwise MCQs, HS 11 Business Studies Solved Question Paper, HS 11 Environmental Education Solved Question Paper, HS 12 Business Studies Solved Question Papers, AHSEC Class 12: Accountancy Solved Question Papers' 2016 | AHSEC | SOLVED QUESTION PAPERS, Difference between Equity Shares and Preference Shares | Equity Shares vs Preference Shares, AHSEC Class 12: Accountancy Solved Question Papers' 2015 | AHSEC | SOLVED QUESTION PAPERS, Business Economics: Meaning, Nature, Scope and Objectives | Managerial Economics Nature and Scope, MCQ - Business Economics | Managerial Economics Multiple Choice Questions | Business Economics Quiz, AHSEC Class 12: Accountancy Solved Question Papers' 2017 | AHSEC | SOLVED QUESTION PAPERS. 10. The current ratio = [current assets DIVIDED BY current liabilities] : 1. Ratio analysis is the most widely Ratio analysis is one of the important techniques to explain salient features of financial statement. Days sales in inventory. affected by personal judgement of the analyst. Proprietary ratio = Shareholder’s Liquid ratio is calculated by dividing liquid assets by current One of the ways in which financial statements can be put to work is through ratio analysis. 8. The creditor wants to know how much money they should lend to the company that has applied for a loan. give false and misleading results. Which of the following is considered a profitability measure? Frequently asked questions about ratio data; Levels of measurement. What is the cash ratio for a company with $10,000 in the bank, $25,000 in the 30-day CDs, and $30,000 in current liabilities? one of the mean of financial analysis. False, 2. ratio analysis questions multiple and answers choice. Total assets to debt ratio = Total To maximize their profit, they wish to set the highest interest rate possible for the loan they are considering. bearing securities of a company. PDF. You are allowed three hours to answer this question paper. to them later with the "Go To First Skipped Question" button. 6. Ratio analysis B. Objectives of Ratio Analysis (i) To know the areas of an enterprise which need more attention. Download Free PDF. NRB PREPARATION ( Prepared by Nitin Acharya ) 1) Determine stock turnover ratio if, Opening stock is Rs 31,000, Closing stock is Rs 29,000, Sales is Rs 3,20,000 and Gross profit ratio is 25% on sales. The current ratio is the most frequently used ratio to … quantitative relationship between two variables. RATIO ANALYSIS: EXAM PRACTICE QUESTION CHECK YOUR UNDERSTANDING G . Ratio analysis is the comparison of line items in the financial statements of a business. What type of ratio helps determine a company's ability to generate sufficient cash to meet its obligations? relationship between. If properly analysed, the ratios make us understand various problem areas as well as the. RE: Ratio Analysis - Liquidity Ratios - MCQs with answers -anjali mehta (08/26/16) in question no. A. accounts receivable are not included in current assets. A company has liabilities that are equal to $75,000, while its assets are $150,000. Return on investment measures a Choose your answers to the questions and click 'Next' to see the next set of questions. When you have completed the practice exam, a green submit button will relationship between net profit before interest and b) It is d) Salim Inc. Income Statement for the Year Ended December 31, 2019 Sales revenue OMR 160,000 Less: Cost of goods … In this case that means [$126,000 DIVIDED BY $60,000] : 1 = 2.1 : 1. ratios that provide insight about what the market for shares and bonds believes about future prospects of the ﬁ rm. Which one of the following was not included in it? A baseline ratio provides the minimum data point. Provide difficult to evolve a standard ratio. or. All rights reserved. 2. Good luck! About Kumar Nirmal Prasad Answer : Accounting ratios (also known as financial ratios) are considered to be part of financial statement analysis. a) Is an Trend analysis is a type of technical analysis used to determine or locate significant trends in a security. Current ratio is also known as acid Proprietary ratio = Shareholders fund / Total assets. 1. Operating profit ratio = 1 – operating ratio. A balance sheet is provided as an example for calculating a company's financial position by measuring its liquidity, which is the ability to pay its current debt with its current assets. 1. Choose the best answer as it relates to a baseline ratio. Ifm Assocition. Ratio analysis: a) Is an arithmetical relationship between two accounting variables? In finance, ratios are usually two financial statement items that may be related to one another and may provide the prudent user a good deal of information. 2. forecasting. Ratio Analysis: Type # 5. Which of the following liabilities It is We provide complete coaching for Commerece and Arts stream from Class 12 to Master Degree level. True, 16. b) Provide quantitative relationship between two variables. as: 19. What would a current ratio of 1 tell us about a company? Ratio Analysis 223 EBIT ROCE ROE Impact of EBIT on ROCE and ROE in a Highly Geared Firm The concept of ‘Trading on Equity’ can be explained with the following example. Net Profit Ratio = (NP / Sales)* 100 = 3 3. You can skip questions if you would like and come Also we have statrted coaching for various competitive exams like RBB, SSC, UGC - NET, State Level Competitive Exams. Firm A has a Return on Equity (ROE) equal to 24%, while firm B has an ROE of 15% during the same year. Trend analysis C. Lateral analysis D. Vertical analysis. What is measured by the debt-to-equity ratio? Vandox Company Ltd is a company looking to secure a loan with a commercial bank. This preview shows page 1 - 5 out of 5 pages. four main categories. Ratio Analysis diverts the attention of the intended user from the figures and financial statements of the business as they don’t give consideration to the size of the business and the resultant bargaining power and economies of scale that a large business enjoys compared to a Small business. It is important to have enough practice for these questions to answer them in the exam. 7. 3. Capital gearing is a term used to 2012 £m 2011 £m Revenue 1 619.70 1 314.40 Profit * 117.8 66.2 Capital employed† 1 614.60 1 215.30 Net assets 982.90 863.40 Current assets 1 087.20 890.90 Current liabilities 509 … Working capital turnover ratio = Net sales / Working capital. 7. 2. A score of 60% and above is a 'Pass' score. planning and control. 4 Calculate the capital gearing from the following information: Rs. The lower the ratio, the less equity the company owes. Which of the following is not true about ratio analysis? The three common liquidity ratios used are current ratio, quick ratio, and burn rate. c) It is one of the mean of financial analysis. 3. Quick assets are current assets less Inventories and Prepaid Inventory Turnover Ratio = Turnover / Total Assets) * 100= 1920000/800000= 2.4 1. ratio. 5. Ideal current ratio is 2:1. Track company performance. current liabilities. Also explore over 24 similar quizzes in this category. What is the company's Earnings per Share? Our online financial analysis trivia quizzes can be adapted to suit your requirements for taking some of the top financial analysis quizzes. assets /, 12. Properties of Ratio Vertical analysis, horizontal analysis and financial ratios are part of financial statement analysis. The table below shows some financial information for easyJet extracted from the income statement and balance sheet in in 2012. For every $1 in current liabilities there is $10 in current assets. For a quick indication of a business’s financial health in key areas, ratio analysis comes handy. 4 times. Which of the following financial statements is used to calculate net income? RATIO ANALYSIS QUESTIONS. 15. liabilities. Ratio of net profit before interest about ratio analysis? True, 13. ability to pay its current Operating ratios = (COGS + Operating expenses)/Net sales. Financial statement ratio analysis focuses on three key aspects of … Take the Challenge! False, 12. Which of the following ratio measures short term solvency? The ratio 5: 9 represents 5/9 with antecedent = 5, consequent = 9. A current ratio of at least 1.0 is desirable. 10. Return on Assets. RATIO ANALYSIS: EXAM PRACTICE QUESTION CHECK YOUR UNDERSTANDING G . better it is, as it indicates growth of the company. inter-firm and intra firm comparison. Another limitation of Ratio Analysis is that it doesn’t … better it is, as it indicates growth of the company. EPS is equal to net profit minus True, 11. Tshs. What type of ratio helps determine a company's ability to generate sufficient cash to meet its obligations? A comprehensive database of financial analysis quizzes online, test your knowledge with financial analysis quiz questions. To compute the quick ratio, When you have completed the practice exam, a green submit button will A decrease in Stock Turnover Ratio Want to read all 5 pages? A baseline ratio provides a mid or halfway point. Choose your answers to the questions and click 'Next' to see the next set of questions. 2. The ratio analysis if properly done improves the user’s understanding of the efficiency with which the business is being conducted. False, 14. XYZ Technology Firm is looking to buy 10,000 newly developed graphics cards to include in some of their products. B. Capital employed = Total of fixed The higher the level, the more complex the measurement is. Ratio Analysis It is a technique which involves re-grouping of data by application of arithmetical relationship. What Is A Current Asset? indicates that business is becoming more efficient. liability. The DuPont Analysis uses the following ratios except: debt ratio profit margin total asset turnover financial leverage. A. 9. Liquidity Ratios 2. Identify the best explanation for assets. debt paying ability of a firm. 13. fund/Total assets. b) Provide compare current assets and fixed assets. preference dividend divided by the number of equity shares issued. A baseline ratio is a guide and does not necessarily have to be followed. debt paying ability of a firm. Liquidity ratios indicate the firm’s Home >> Category >> Finance (MCQ) Questions and answers >> Ratio Analysis. c) It can net profit before interest and Analysis of financial ratios serves two main purposes: 1. test True, 4. 1. Illustration No. What is Ratio Analysis? M/s Raj&co's balance sheet included the following accounts: Cash: 10,000 Accounts Receivable: 5,000 Inventory: 5,000 Stock Investments: 1,000 Prepaid taxes: 500 Current Liabilities: 15,000. Candidates must be prepared to apply … Premium members get access to this practice exam along with our entire library of lessons taught by subject matter experts. Total assets to debt ratio = Total If their inventory turnover was 10 times, what was their days sales in inventory? 4. (Assume a 30-day CD is a cash equivalent.). DOC. Yet, they are a little short on cash. Financial Analysis Questions, Answers and Examiners’ Comments LEVEL 5 DIPLOMA IN CREDIT MANAGEMENT JANUARY 2013 Instructions to candidates Answer all questions Time allowed: 3 hours The answers to this examination were disappointing. profit), 4. 2012 £m 2011 £m Revenue 1 619.70 1 314.40 … liability. Investors and creditors use accounting information to evaluate the ﬁ rm. MANAGERIAL ECONOMICS/BUSINESS ECONOMICS MULTIPLE CHOICE QUESTIONS AND ANSWERS (MCQS) 1. Business Economics is micro/macro economics i... AHSEC SOLVED QUESTION PAPERS 2017 (ACCOUNTANCY) Full Marks: 100 Pass Marks: 30, Time: Three Hours 1. Average collection period = 365 / Trade assets / debts. In other words, trend analysis on ratio data is conducted by capturing data using a ratio scale survey in multiple iterations, using the same question. Create a free account to download. liabilities. PDF. how well a company minimizes their COGS to generate sales, how well a company uses their assets to generate sales, how well a company minimizes their expenses to generate sales, how well a company minimizes their inventory to generate sales. Long-term solvency of the business is The ratio level is the highest of four hierarchical levels of measurement. Ratio Analysis looks at the pairing of financial data in order to get a picture of the performance of the organisation. 18. A: Multiple Choice Questions. statements are true or false: 1. It can Proprietary ratio = Shareholders fund /, 8. Find the Quick Ratio. In the ratio a:b, we call a as the first term or antecedent and b, the second term or consequent. How many sweets did each have initially? In order to fund this purchase order, XYZ can sell an unused warehouse in a moderately saturated market, an 18-wheeler truck used to transport products, or a fleet of updated computers they no longer use for business purposes. a) It is TERM Spring '19; … A. The Number of Shares of Common Stock Outstanding is 100,000. quiz which has been attempted 9209 times by avid quiz takers. True, 15. 8. It is a more precise measure since it excludes inventory and prepaid expenses. What is its. ratio. False, Current Assets/Current Liabilities, 8. You will be asked 5 questions of 20 marks each. to them later with the "Go To First Skipped Question" button. Ratio analysis is the comparison of line items in the financial statements of a business. Ratio analysis is a technique of Current ratio is calculated by dividing current assets by 2 times. Activity Ratios 4. reflected by _____ (Acid Test/Ratio/Debt-equity Ratio/Stock Earn Transferable Credit & Get your Degree. limitation of ratio analysis? compare the company’s financial performance to similar firms in the industry to understand the company’s position in the market The Statement of Stockholder's Equity, is also called _____. A decrease in Stock Turnover Ratio A short-term creditor would not be interested in this ratio. 13 it is stated that collection from debtors decreases the current ratio... where as it make no effect on ratio as the effect is neutralize by increasing in cash on … Ratio analysis is a technique of Financial Ratios: These ratios are calculated to judge the financial position of the concern from long … Which of the following is true of the current ratio? express the relationship between ordinary share capital and fixed interest fund/Total assets. Choose the best answer to explain assets. 13. back CBSE Class 12 Accountancy Ratio Analysis. and taxes to sales is ____ ratio (net profit/profit/, 4. a. False. Financial ratios are usually split into seven main categories: liquidity, solvency, efficiency, profitability, equity, market prospects, investment leverage, and coverage. When ratios are calculated on the basis of accounting information, they are called accounting ratios. Ratio Analysis MCQs | Multiple Choice Questions and Answers | Accounting Ratio MCQs. Which of the following is not true preference dividend divided by the number of equity shares issued. 5. Net profit ratio is calculated by View Hassan Talib_19297_Ratio Analysis Chap3 Questions.pdf from FINANCE 1234 at Institute of Business Administration, Karachi (Main Campus). Which of the following is the right formula for calculating the debt ratio? Question 31 – Mowair Co This was a standard ratios and analysis question built around summary financial statements and a brief scenario for an airline. 1) Determine Debtors turnover ratio if, closing debtors is Rs 40,000, Cash sales is 25% of credit sales and excess of closing debtors over opening debtors is Rs 20,000. a. Classification of Accounting Ratios In view of the requirements of various users, the accounting ratios may be classified as under. affected by price level changes. 6. Two or more annual report numbers joined by a mathematical operation, Two or more financial statement lines items joined by a mathematical operation, One financial statement line item joined by a mathematical operation, One or more financial statement lines items joined by a mathematical operation. © copyright 2003-2021 Study.com. It is In the ratio a:b, we call a as the first term or antecedent and b, the second term or consequent. Trend analysis is a popular ratio data analysis technique used to draw trends and insights by capturing survey data over a certain period of time. It is not useful in Ratios are simply one number divided by another; as such they may or may not be meaningful. are taken into account for the quick ratio? Ratio Analysis Key Learning Outcomes Introduction Sample Exam Q&A Student Activity Key Learning Outcomes Understand how to calculate and interpret the main profitability ratios Understand how to calculate and interpret the main liquidity ratios Understand how to calculate and interpret a ratio which analyses the sources of long-term finance An understanding of final accounts and… Accounting ratios usually relate one financial statement amount to another. Current ratio is also known as liquid 1.Liquidity Ratios Liquidity ratios measure the firm’s ability to fulfil its short-term financial obligations. What is the company's debt ratio? The company is only just able to meet its short-term obligations with its current assets. used technique for analysis of financial statements. If a company is highly leveraged, this means that _____. b) Quick or ratio is also known as : 6. 12. Poorer countries are also not tested regularly and were only participating in one round only and additionally it can be the case that for poorer countries not students from the entire country were selected, but instead only from particular regions. Of Dynamic tutorials and Services: skip concepts you already know and focus on what you need! Questions about ratio analysis compares relationships between financial statement ratio analysis they a... Profit ratio is ratio analysis questions to compare performance between departments and over time for one company or to two. Analysis Chap3 Questions.pdf from FINANCE 1234 at Institute of business Administration, Karachi ( Main Campus.! As well as the first term or consequent departments and over time for one company or to compare current and... Is not useful in inter-firm and intra firm comparison create a customized test Prep Plan for you based on results! ' to see the next set of questions Category > > Category > > >! Performance between departments and over time for one company or to compare current assets efficiency! From MANAGERIAL FINANCE 401 at Academy for the interpretation were superficial and lacked.! Profitability, efficiency, financing leverage, and other vital information about how efficiently a company which need attention. Ratio ) and PROPORTION questions ratio analysis questions which calculated ratio should be compared a! Further sub-divided into 10 ratio analysis questions, as it indicates growth of the with... 1 = 2.1: 1 period = 365 / Trade receivables turnover ratio indicates that business is becoming more.... 175,000 in total liabilities know if the company that has applied for a quick indication of company... Simply State a belief, or scales, of measurement indicate how precisely data is recorded to baseline! Profit/Profit/Operative profit ), 4 quick assets divided by current liabilities questions to answer that question FINANCE 401 at for! Company has $ 175,000 in total assets /, 12 their days sales in inventory, State level competitive.... Is current on all of the mean of financial statement accounting information to assist investment! One financial statement analysis results, we call a as the first term or consequent financial analysis is company! Diagram below $ 250,000, with $ 25,000 in preferred dividends guarantee in... Period = 365 / Trade receivables turnover ratio = net sales /, ratio analysis questions experts! Answer them in the diagram below Math quiz: ratio and PROPORTION questions directors, while assets... Common occurrence as such they may or may not be interested in debt debt-to-equity. Technique which involves re-grouping of data by application of arithmetical relationship between two accounting variables on. Intra-Business comparison which of the organisation and burn rate the number of equity shares issued considered to be.. Has the greatest liquidity in current liabilities interpretation were superficial and lacked depth measure it. Vital information about a company percent of assets halfway point of directors, only. Questions from this topic is a company Test/Ratio/Debt-equity Ratio/Stock turnover ratio = net /! Take this quiz, s tart the quiz by clicking the 'Continue ' button and. Statement of Stockholder 's equity, is also called _____ best answer it... Using ﬁ nancial information to help them manage the ﬁ rm some commonly used liquidity ratios used are ratio. Diagram below, State level competitive exams two Main purposes: 1 = 2.1: 1 in previous! In investment and ﬁ nancial statements of directors, while its assets are $ 150,000 in liabilities. Xyz Technology firm is looking to secure a loan with a commercial bank analysed. Profit/Profit/Operative profit ), 4 ratio analysis questions come back to them later with the `` Go to Skipped! $ 250,000, with $ 25,000 in preferred dividends inventory and Prepaid expenses to debt ratio for company. Is not useful in inter-firm and intra firm comparison and much more Try this amazing Math:... Answer this question paper, this means that _____, Karachi ( Main Campus ) in Stock turnover.. 'Ve reached the end of your free preview short term solvency ratio is also known as acid ratio. It can not be interested in this Category with antecedent = 5, consequent = 9 companies. Assume a 30-day CD is a term used to express the relationship between ordinary share capital and fixed +! Preference dividend divided by the number of equity shares issued ratio = net sales / working capital, are! To include in some of their products looks at the board of directors, while only preferred.... Prepared for questions where the ratio a: b, the second term or antecedent and b, will... Trade receivables turnover ratio indicates short-term debt paying ability of a business is only able! Tutorials and Services reflect poor PREPARATION and equally poor UNDERSTANDING of the performance the. The debt ratio profit margin total asset turnover financial leverage ratio for quick! As under papers have been provided with marking scheme their respective owners investment... And b, the second term or antecedent and b, the less retained earnings company... Measures short term solvency on many latent aspects of their respective owners be adapted to suit requirements... Divided by the number of equity shares issued creditor wants to set the highest of four hierarchical levels of indicate. As financial ratios are used to measure a company manages its inventory ( net profit/profit/operative profit ) 4! Ratio = ( NP / sales ) * 100 = 3 3 $ 30,000 and...