Question 1

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 ?

Accepted Answer

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

Question 2

Vertical analysis is made on the basis of __________.

Accepted Answer

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 A

Question 3

Horizontal analysis is done by analyzing ____________.

Accepted Answer

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

Question 4

Comparative statement analysis sheet is __________.

Accepted Answer

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

Question 5

The relationship between two financial variables can be expressed in:

Accepted Answer

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

Question 6

Trend analysis is significant for ____________.

Accepted Answer

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

Question 7

Financial statements are ____________.

Accepted Answer

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

Question 8

Which of the following is not included in current assets.

Accepted Answer

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

Question 9

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

Accepted Answer

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

Question 10

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.

Accepted Answer

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

Question 11

Which of the following are Non-current assets?

Accepted Answer

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

Question 12

Working capital turnover ratio can be determined by :

Accepted Answer

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 13

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

Accepted Answer

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

Question 14

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

Accepted Answer

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

Question 15

Liquidity ratios are expressed in

Accepted Answer

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

Question 16

Return on properties funds is also known as.

Accepted Answer

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

Question 17

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

Accepted Answer

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

Exam 3: Financial Statement Analysis and Ratios: Part A