Deck 3: Financial Statement Analysis and Ratios: Part A

Question 1

Which of the following are Non-current assets?

A)land, building and plant
B)leasehold property
C)computer software
D)all of the above

Answer 1

all of the above

Question 2

Financial statements are ____________.

A)anticipated facts
B)recorded facts
C)estimated of facts
D)unknown facts

Answer 2

recorded facts

Question 3

Trend analysis is significant for ____________.

A)forecasting and budgeting
B)profit planning
C)capital rationing
D)working capital management

Answer 3

profit planning

Question 4

In common size income statement analysis, which is taken as 100 percent?

A)sales
B)cost of goods sold
C)purchases
D)total assets

Question 5

Comparative statement analysis sheet is __________.

A)vertical analysis
B)horizontal analysis
C)either vertical or horizontal analysis
D)neither vertical nor horizontal analysis

Question 6

Financial statements are meaningful and useful only when they are ___________.

A)verified
B)presented to owners
C)analyzed and interpreted
D)published

Question 7

Vertical analysis is made on the basis of __________.

A)single set of financial statements
B)multiple sets of financial statements
C)different schedules attached to financial statements
D)similar set of financial statements

Question 8

Horizontal analysis is done by analyzing ____________.

A)quarterly statement
B)half yearly statement
C)financial statements of several years
D)financial statements of a particular year

Question 9

When the concept of ratio is defined in respect to the item shown in the financial statements, it is termed as

A)accounting ratio
B)financial ratio
C)costing ratio
D)none of the above

Question 10

The relationship between two financial variables can be expressed in:

A)pure ratio
B)percentage
C)rate or time
D)all the above

Question 11

Stock is considered as a liquid asset as anytime it can be converted into cash immediately.

A)yes
B)no
C)only yes
D)none of the above

Question 12

Return on properties funds is also known as.

A)return on net worth
B)return on shareholders fun
C)return on the shareholders' investment
D)all of the above

Question 13

What will be the Gross Profit if , total sales is Rs 2,60,000,cost of net goods sold is Rs 2,00,000 & sales return is Rs10,000 ?

A)13 %
B)28%
C)26%
D)20%

Question 14

Which of the following is not included in current assets.

A)debtors
B)stock
C)cash at bank
D)cash in hand

Question 15

Liquidity ratios are expressed in

A)pure ratio form
B)percentage
C)rate or time
D)none of the above

Question 16

Working capital turnover ratio can be determined by :

A)( gross profit / working capital )
B)( cost of goods sold / net sales )
C)( cost of goods sold / working capital)
D)none of the above

Question 17

Determine Working capital turnover ratio if, Current asset is Rs 1,50,000, current liability is Rs 1,00,000 & cost of goods sold is Rs 3,00,000.

A)5 times
B)6 times
C)3 times
D)1.5 times