Question 1

Fixed assets ratio is a

Accepted Answer

A)  short-term solvency ratio.
B)  long-term solvency ratio.
C)  profitability ratio.
D)  turnover ratio. B

Question 2

Prepaid expenses is an example of .

Accepted Answer

A)  fixed assets.
B)  current assets.
C)  fictitious assets.
D)  current liabilities. B

Question 3

The ratio which shows the proportion of profits retained in the business out of the current year's profits is

Accepted Answer

A)  retained earnings ratio.
B)  payout ratio
C)  earnings per share.
D)  price earnings ratio A

Question 4

Return on investment is a

Accepted Answer

A)  turnover ratios.
B)  short term solvency ratio.
C)  profitability ratios.
D)  long term solvency ratio.

Question 5

The ratio establishes the relationship between profit before interest and tax and fixed interest charges is

Accepted Answer

A)  interest cover ratio.
B)  fixed dividend cover ratio.
C)  debt service coverage ratio.
D)  dividend yield ratio.

Question 6

Sales - Gross Profit = .

Accepted Answer

A)  net profit.
B)  administrative expenses.
C)  cost of production.
D)  cost of goods sold.

Question 7

The ratios which reveal the final result of the managerial policies and performance is .

Accepted Answer

A)  turnover ratios.
B)  profitability ratios.
C)  short term solvency ratio.
D)  long term solvency ratio.

Question 8

Preliminary expenses is an example of .

Accepted Answer

A)  fixed assets.
B)  current assets.
C)  fictitious assets.
D)  current liabilities.

Question 9

Profit for the objective of calculating a ratio may be taken as

Accepted Answer

A)  profit before tax but after interest
B)  profit before interest &tax
C)  profit after interest & tax
D)  all of the above

Question 10

The ratio which is calculated to measure the productivity of total assets is

Accepted Answer

A)  return on equity.
B)  return on shareholders' funds.
C)  return on total assets.
D)  return on equity share holders' funds.

Question 11

Net profit ratio is a .

Accepted Answer

A)  turnover ratio.
B)  long term solvency ratio.
C)  short term solvency ratio
D)  profitability ratio.

Question 12

If sales is Rs 5,00,000 & net profit is Rs 1,20,000 Net profit ratio is

Accepted Answer

A)  24%
B)  41%
C)  60%
D)  none of the above

Question 13

Proprietary ratio is a

Accepted Answer

A)  short-term solvency ratio.
B)  long-term solvency ratio.
C)  profitability ratio.
D)  turnover ratio.

Question 14

The ratio shows the preference dividend as a proportion of profit available for shareholders is

Accepted Answer

A)  interest cover ratio.
B)  fixed dividend cover ratio.
C)  debt service coverage ratio.
D)  dividend yield ratio.

Question 15

Return on equity is also called

Accepted Answer

A)  return on investment.
B)  gross profit ratio.
C)  return on shareholders' funds.
D)  return on net worth.

Question 16

Inventory or stock turnover ratio is also called .

Accepted Answer

A)  stock velocity ratio.
B)  debtors velocity ratio.
C)  creditors velocity ratio.
D)  working capital turnover ratio.

Question 17

The ratio which measures the profit in relation to capital employed is known as

Accepted Answer

A)  return on investment.
B)  gross profit ratio.
C)  operating ratio.
D)  operating profit ratio.

Question 18

Determine stock turnover ratio if, Opening stock is Rs 31,000 , Closing stock is Rs 29,000, Sales is Rs 3,20,000 & Gross profit ratio is 25% on sales.

Accepted Answer

A)  31 times
B)  11 times
C)  8 times
D)  32 times

Question 19

Turnover ratio is also known as .

Accepted Answer

A)  activity ratios.
B)  solvency ratios.
C)  liquidity ratios.
D)  profitability ratios.

Question 20

The dividend is related to the market value of shares in .

Accepted Answer

A)  interest cover ratio.
B)  fixed dividend cover ratio.
C)  debt service coverage ratio.
D)  dividend yield ratio.

Exam 4: Financial Statement Analysis and Ratios: Part B

Fixed assets ratio is a

Prepaid expenses is an example of .

The ratio which shows the proportion of profits retained in the business out of the current year's profits is

Return on investment is a

The ratio establishes the relationship between profit before interest and tax and fixed interest charges is

Sales - Gross Profit = .

The ratios which reveal the final result of the managerial policies and performance is .

Preliminary expenses is an example of .

Profit for the objective of calculating a ratio may be taken as

The ratio which is calculated to measure the productivity of total assets is

Net profit ratio is a .

If sales is Rs 5,00,000 & net profit is Rs 1,20,000 Net profit ratio is

Proprietary ratio is a

The ratio shows the preference dividend as a proportion of profit available for shareholders is

Return on equity is also called

Inventory or stock turnover ratio is also called .

The ratio which measures the profit in relation to capital employed is known as

Determine stock turnover ratio if, Opening stock is Rs 31,000 , Closing stock is Rs 29,000, Sales is Rs 3,20,000 & Gross profit ratio is 25% on sales.

Turnover ratio is also known as .

The dividend is related to the market value of shares in .