Question 1

_________________ analysis is an analytical tool that involves expressing the reported financial numbers in relative terms

Accepted Answer

Financial

Question 2

Which ratio/s can be used to explain changes in the profit margin?

Accepted Answer

A) gross profit margin 
B) expense to sales ratios 
C) days inventory 
D) return on equity 
A) gross profit margin 
B) expense to sales ratios 
C) days inventory 
D) return on equity A

Question 3

A high times debtors turnover indicates

Accepted Answer

A) the entities sales have increased. 
B) a large percentage of the entities sales are on credit. 
C) customers are clearing debts more quickly. 
D) customers are clearing debts more slowly. 
A) the entities sales have increased. 
B) a large percentage of the entities sales are on credit. 
C) customers are clearing debts more quickly. 
D) customers are clearing debts more slowly. C

Question 4

All the statements concerning net tangible asset backing (NTAB)per share are true,$\bold{except:}$

Accepted Answer

A) intangible assets such as goodwill are excluded from the calculation 
B) it calculates the cash that would be available to each shareholder if the company was liquidated. 
C) the difference between NTAB and the market price of the share is an indication of the market's assessment of the entity's future growth prospects. 
D) it is calculated as ordinary shareholders' equity less intangible assets divided by number of ordinary shares on issue at year-end. 
A) intangible assets such as goodwill are excluded from the calculation 
B) it calculates the cash that would be available to each shareholder if the company was liquidated. 
C) the difference between NTAB and the market price of the share is an indication of the market's assessment of the entity's future growth prospects. 
D) it is calculated as ordinary shareholders' equity less intangible assets divided by number of ordinary shares on issue at year-end.

Question 5

______________revenue divided by average total assets equals the asset turnover ratio.

Accepted Answer

The answer of ______________revenue divided by average total assets equals...

Question 6

The dividend payout ratio can be calculated as:

Accepted Answer

A) market price per share divided by dividend per share 
B) dividend per share divided by earnings per share 
C) annual dividend divided by the number of ordinary shares on issue 
D) current market price per share divided by dividend per share 
A) market price per share divided by dividend per share 
B) dividend per share divided by earnings per share 
C) annual dividend divided by the number of ordinary shares on issue 
D) current market price per share divided by dividend per share

Question 7

Profit (before tax/after tax)____________________ divided by average equity gives return on equity.

Accepted Answer

The answer of Profit (before tax/after tax)____________________ divided by average...

Question 8

Net cash flows from operating activities divided by current liabilities,is the formula for:

Accepted Answer

A) the quick asset ratio 
B) the cash flow ratio (liquidity) 
C) the turnover of liabilities ratio 
D) the debt coverage ratio 
A) the quick asset ratio 
B) the cash flow ratio (liquidity) 
C) the turnover of liabilities ratio 
D) the debt coverage ratio

Question 9

With ratio analysis,when an income or statement of cash flows item is compared to a balance sheet item:

Accepted Answer

A) the year-end balance of the balance sheet item should be used 
B) the average of the beginning and ending year values should be taken for the balance sheet item rather than just using the year-end value. 
C) the beginning balance of the balance sheet item should be used 
D) none of the options is correct 
A) the year-end balance of the balance sheet item should be used 
B) the average of the beginning and ending year values should be taken for the balance sheet item rather than just using the year-end value. 
C) the beginning balance of the balance sheet item should be used 
D) none of the options is correct

Question 10

The first country to adopt regulations requiring its listed companies to produce an integrated report as their primary report effective 2011 was:

Accepted Answer

A) USA 
B) Australia 
C) South Africa 
D) Germany 
A) USA 
B) Australia 
C) South Africa 
D) Germany

Question 11

_____________ profit divided by sales revenue gives the gross profit margin.

Accepted Answer

The answer of _____________ profit divided by sales revenue gives...

Question 12

Liquidity ratios measure the ability of an entity to:

Accepted Answer

A) survive in the long-term 
B) meet its short term obligations and unexpected cash needs 
C) generate profit 
D) all of the options are correct 
A) survive in the long-term 
B) meet its short term obligations and unexpected cash needs 
C) generate profit 
D) all of the options are correct

Question 13

The times______________ turnover is a measure of how efficiently an entity converts their credit sales into cash.

Accepted Answer

The answer of The times______________ turnover is a measure of...

Question 14

The return on assets ratio can be calculated as

Accepted Answer

A) Profit margin × debt to total assets ratio. 
B) Profit margin × asset turnover ratio. 
C) Gross profit margin × return on equity. 
D) Gross profit margin × cash flow to sales revenue. 
A) Profit margin × debt to total assets ratio. 
B) Profit margin × asset turnover ratio. 
C) Gross profit margin × return on equity. 
D) Gross profit margin × cash flow to sales revenue.

Question 15

A measure of long-term solvency is

Accepted Answer

A) Return on equity ratio. 
B) Profit margin. 
C) Days debtors. 
D) Debt to equity ratio. 
A) Return on equity ratio. 
B) Profit margin. 
C) Days debtors. 
D) Debt to equity ratio.

Question 16

The ratio that converts the absolute dollar amount of profit made to a per share basis is ____________________ share.

Accepted Answer

The answer of The ratio that converts the absolute dollar...

Question 17

Which statement is true?

Accepted Answer

A) If the equity ratio is less than 50% then the entity is more reliant on equity funding than debt funding 
B) The debt ratio indicates how many dollars of debt exist per dollar of equity financing 
C) If the equity ratio is 50% the debt to equity ratio is 200% 
D) The sum of the debt ratio and the equity ratio equals 100% 
A) If the equity ratio is less than 50% then the entity is more reliant on equity funding than debt funding 
B) The debt ratio indicates how many dollars of debt exist per dollar of equity financing 
C) If the equity ratio is 50% the debt to equity ratio is 200% 
D) The sum of the debt ratio and the equity ratio equals 100%

Question 18

Weston Trading Ltd has the following balance sheet figures.The quick asset ratio is:
$\begin{array}{llcc}
& \text { \$ } \
 \text {  Total current assets} &500000\
 \text { Total current liabilities } &150000\
 \text {  Inventory} &200000\
 \text {  Bank} &30000\
\end{array}$

Accepted Answer

A) 1.67:1 
B) 1:1 
C) 2:1 
D) 3.33:1 
A) 1.67:1 
B) 1:1 
C) 2:1 
D) 3.33:1

Question 19

The gross profit margin ratio is calculated by dividing

Accepted Answer

A) profit by sales revenue 
B) profit by shareholder's equity. 
C) gross profit by sales revenue. 
D) sales revenue by cost of sales. 
A) profit by sales revenue 
B) profit by shareholder's equity. 
C) gross profit by sales revenue. 
D) sales revenue by cost of sales.

Question 20

Which of the following statements regarding inventory turnover is correct?

Accepted Answer

A) days inventory is much lower for a supermarket than a shoe retailer 
B) days inventory is a measure of the average length of time it takes to sell inventory 
C) days inventory is a measure of the efficiency of an entity at selling inventory 
D) all the options are correct 
A) days inventory is much lower for a supermarket than a shoe retailer 
B) days inventory is a measure of the average length of time it takes to sell inventory 
C) days inventory is a measure of the efficiency of an entity at selling inventory 
D) all the options are correct

_________________ analysis is an analytical tool that involves expressing the reported financial numbers in relative terms

Which ratio/s can be used to explain changes in the profit margin?

A high times debtors turnover indicates

All the statements concerning net tangible asset backing (NTAB)per share are true, $\bold{except:}$

______________revenue divided by average total assets equals the asset turnover ratio.

The dividend payout ratio can be calculated as:

Profit (before tax/after tax)____________________ divided by average equity gives return on equity.

Net cash flows from operating activities divided by current liabilities,is the formula for:

With ratio analysis,when an income or statement of cash flows item is compared to a balance sheet item:

The first country to adopt regulations requiring its listed companies to produce an integrated report as their primary report effective 2011 was:

_____________ profit divided by sales revenue gives the gross profit margin.

Liquidity ratios measure the ability of an entity to:

The times______________ turnover is a measure of how efficiently an entity converts their credit sales into cash.

The return on assets ratio can be calculated as

A measure of long-term solvency is

The ratio that converts the absolute dollar amount of profit made to a per share basis is ____________________ share.

Which statement is true?

Weston Trading Ltd has the following balance sheet figures.The quick asset ratio is: \ Total current assets 500000 Total current liabilities 150000 Inventory 200000 Bank 30000

The gross profit margin ratio is calculated by dividing

Which of the following statements regarding inventory turnover is correct?

Introduction to Accounting

Business Sustainability

Business Structures

Business Transactions

Balance Sheet

Income Statement and Statement of Changes in Equity

Statement of Cash Flows

Budgeting

Cost-Volume-Profit Analysis

Costing and Pricing in an Entity

Capital Investment

Financing the Business

Performance Measurement

Filters

Exam 8: Analysis and Interpretation of Financial Statements

_________________ analysis is an analytical tool that involves expressing the reported financial numbers in relative terms

Which ratio/s can be used to explain changes in the profit margin?

A high times debtors turnover indicates

All the statements concerning net tangible asset backing (NTAB)per share are true, except:\bold{except:}except:

______________revenue divided by average total assets equals the asset turnover ratio.

The dividend payout ratio can be calculated as:

Profit (before tax/after tax)____________________ divided by average equity gives return on equity.

Net cash flows from operating activities divided by current liabilities,is the formula for:

With ratio analysis,when an income or statement of cash flows item is compared to a balance sheet item:

The first country to adopt regulations requiring its listed companies to produce an integrated report as their primary report effective 2011 was:

_____________ profit divided by sales revenue gives the gross profit margin.

Liquidity ratios measure the ability of an entity to:

The times______________ turnover is a measure of how efficiently an entity converts their credit sales into cash.

The return on assets ratio can be calculated as

A measure of long-term solvency is

The ratio that converts the absolute dollar amount of profit made to a per share basis is ____________________ share.

Which statement is true?

Weston Trading Ltd has the following balance sheet figures.The quick asset ratio is: \ Total current assets 500000 Total current liabilities 150000 Inventory 200000 Bank 30000

The gross profit margin ratio is calculated by dividing

Which of the following statements regarding inventory turnover is correct?

Introduction to Accounting

Business Sustainability

Business Structures

Business Transactions

Balance Sheet

Income Statement and Statement of Changes in Equity

Statement of Cash Flows

Budgeting

Cost-Volume-Profit Analysis

Costing and Pricing in an Entity

Capital Investment

Financing the Business

Performance Measurement

Filters

All the statements concerning net tangible asset backing (NTAB)per share are true, $\bold{except:}$