Question 1

The following information is from the annual report of Thunderstruck Ltd:
Statement of financial position of Thunderstruck Ltd as at 31 December 201X

Income statement extract of Thunderstruck Ltd for the year ended 31 December 201X
$$\begin{array} { l r } 
\text { Revenue } & 250 \
\text { Gross profit } & 75 \
\text { Operating profit } & 45 \
\text { Profit for the period } & 25
\end{array}$$
From the information provide above,calculate the debtors (trade receivables)ratio

Accepted Answer

A)  6.25 days 
B)  58.4 days 
C)  65.7 days 
D)  16 days

Question 2

The following information is from the annual report of Thunderstruck Ltd:
Statement of financial position of Thunderstruck Ltd as at 31 December 201X

Income statement extract of Thunderstruck Ltd for the year ended 31 December 201X
$$\begin{array} { l r } 
\text { Revenue } & 250 \
\text { Gross profit } & 75 \
\text { Operating profit } & 45 \
\text { Profit for the period } & 25
\end{array}$$
From the information provide above,calculate the liquidity ratio

Accepted Answer

A)  2.44:1 
B)  2:1 
C)  1.48:1 
D)  1.77:1

Question 3

Non-current liabilities are used in the calculation of the current ratio

Accepted Answer

A) True 
 B)False

Question 4

The price earnings ratio,dividend cover and dividend yield provide information on:

Accepted Answer

A)  Stock market performance 
B)  Liquidity 
C)  Profitability 
D)  Utilization of assets

Question 5

Which of the following statements is correct?

Accepted Answer

A)  Shareholders motivated by the prospects of higher future share price growth tend to invest in companies with low dividend cover 
B)  Shareholders motivated by the prospects of higher future share price growth tend to invest in companies with a low P/E ratio 
C)  Shareholders who buy shares for a regular income tend to invest in companies with low dividend cover 
D)  Shareholders who buy shares for a regular income tend to invest in companies with high dividend cover

Exam 4: Ratios and Interpretation: a Straightforward Introduction

Non-current liabilities are used in the calculation of the current ratio

The price earnings ratio,dividend cover and dividend yield provide information on:

Which of the following statements is correct?