Statement Analysis Tools and Accounting Ratios Test

Result

Statement Analysis Tools and Accounting Ratios Test - 16

Score
-
out of -
Rank
-
out of -

TIME Taken - -

SHARING IS CARING

If our Website helped you a little, then kindly spread our voice using Social Networks. Spread our word to your readers, friends, teachers, students & all those close ones who deserve to know what you know now.

Weekly Quiz Competition

Question 1
1 / -0

The various factors affecting the ROI can be put through a chart, it is known as __________.

A
Du Pont Control Chart

B
Muster Roll

C
Dial Time Recorder

D
None of the above

Solution

The Du Pont chart is a chart of financial ratios, which. analyses the Net Profit Margin in terms of asset turnover. The Du Pont Analysis is. used as a tool in measuring the managerial performance by linking the net profit.
Question 2
1 / -0

Choosing a price based upon its short-term effect on current profit, cash flow, or return on investment reflects which of the following pricing objectives?

A
Current profit maximization

B
Product quality leadership

C
Market share leadership

D
Survival
Question 3
1 / -0

Accounting information given by a company:
Total assets turnover $$3$$ times
Total Assets = $$Rs.100000$$
Net profit margin $$10$$%
The net profit is _____________.

A
$$Rs. 10,000$$

B
$$Rs. 15,000$$

C
$$Rs. 25,000$$

D
$$Rs. 30,000$$

Solution

Total assets t/o=Net Sales/Total Assets.
Let net sales be 'x'
Given: 3='x'/1,00,000
Therefore 'x'=1,00,000 X 3= 3,00,000
Net profit = Sales X Net profit margin= 3,00,000 X 10%= Rs.30,000
Question 4
1 / -0

Debt Equity ratio is a __________ .

A
Solvency ratio

B
Payout ratio

C
Liquidity ratio

D
Accounting ratio

Solution

Solvency means the position of a company to meets its long term obligations. Solvency ratio is ratio that shows whether the company will be able to meet its long term obligations as when they become due. Debt to equity ratio is calculated to measure the long term soundness of the company. It expresses the relationship between external debts and internal equities.
Question 5
1 / -0

Activity ratio is ____________________.

A
$$\dfrac {\text {Capacity ratio}}{\text {Efficiency rate}}$$

B
$$\dfrac {\text {Efficiency rate}}{\text {Capacity ratio}}$$

C
Capacity ratio $$\times$$ Efficiency rate

D
None of these

Solution

Activity ratios are a category of financial ratios that measure a firms ability to convert different accounts within its balance sheet into cash or sales. Activity ratios measures the relative efficiency of a firm based on its use of its assets, leverages, or other similar balance sheet items and are important in determining whether a company's management is doing a good enough job of generating revenues and cash from its resources.
Question 6
1 / -0

Current Ratio $$2.5$$, Liquid Ratio $$1.5$$ and Working Capital $$Rs. 60,000$$. What is the amount of Current Assets?

A
$$Rs. 60,000$$

B
$$Rs. 80,000$$

C
$$Rs. 1,00,000$$

D
$$Rs. 1,20,000$$

Solution

Current Ratio = Current Assets (C.A)/ Current Liabilities (C.L) = $$2.5$$
So, CA= $$2.5$$ CL

Now, Working Capital = Current Assets(C.A) minus Current Liabilities (C.L) = $$Rs.60000$$
So, C.A - C.L = $$60000$$
$$2.5$$ C.L-CL = $$60000$$
C.L = $$Rs. 40000$$

Now, C.A = $$2.5$$ x $$40000$$ = $$Rs. 100000$$
Question 7
1 / -0

A) Equity to fixed interest - bearing securities is Acid Test Ratio.
B) Ratio analysis is a technique of planning and control.
Of these.

A
Both (a) and (b) are true

B
Both (a) and (b) are false

C
(a) is true but, (b) is false

D
(a) is false but, (b) is true

Solution

a) The acid-test, or quick ratio, compares a company's most short-term assets to its most short-term liabilities to see if a company has enough cash to pay its immediate liabilities, such as short-term debt. The acid-test ratio disregards current assets that are difficult to liquidate quickly such as inventory.
b) The purpose and importance of ratio analysis are to evaluate or analyze the financial performance of the firm in terms of Risk, Profitability, Solvency, and Efficiency. It helps us to compare the trends of two or more company over a period of time.
Question 8
1 / -0

Ratio of Net profit before Interest and Tax to sales is called _________________.

A
Operating Profit Ratio

B
Capital gearing

C
Solvency ratio

D
Stock turnover ratio

Solution

The net profit of a company before interest and tax is known as operating profit, income from operations and earnings before interest and taxes. Operating Profit Ratio = Operating Profit / Sales x 100.
Question 9
1 / -0

Long-term solvency is indicated by __________________.

A
Debt-Equity ratio

B
Net Profit ratio

C
Current ratio

D
Accounting ratio

Solution

Long -term solvency is indicated by Debt-equity ratio. The debt-to-equity (D/E) ratio is calculated by dividing a company's total liabilities by its shareholder equity. These numbers are available on the balance sheet of a company's financial statements.
Question 10
1 / -0

One aspect of the working capital management is the trade-off between profitability and _______________.

A
Risk

B
Liability

C
Uncertainity

D
Innovation

Solution

The risk-return trade-off involved in managing the firm's working capital is a trade-off between the firm's liquidity and its profitability.
Other things being equal, the greater the firm's reliance is on the short-term debts or current liability in financing its current investment, the greater the risk of illiquidity will be there.

User

Question Analysis

Correct -
Wrong -
Skipped -

My Perfomance

Score
-
out of -
Rank
-
out of -

Re-Attempt Weekly Quiz Competition

Statement Analysis Tools and Accounting Ratios Test - 16

Result

Statement Analysis Tools and Accounting Ratios Test - 16

Score

-

Rank

-

SHARING IS CARING

Question 1

Du Pont Control Chart

Muster Roll

Dial Time Recorder

None of the above

Solution

Question 2

Current profit maximization

Product quality leadership

Market share leadership

Survival

Question 3

$$Rs. 10,000$$

$$Rs. 15,000$$

$$Rs. 25,000$$

$$Rs. 30,000$$

Solution

Question 4

Solvency ratio

Payout ratio

Liquidity ratio

Accounting ratio

Solution

Question 5

$$\dfrac {\text {Capacity ratio}}{\text {Efficiency rate}}$$

$$\dfrac {\text {Efficiency rate}}{\text {Capacity ratio}}$$

Capacity ratio $$\times$$ Efficiency rate

None of these

Solution

Question 6

$$Rs. 60,000$$

$$Rs. 80,000$$

$$Rs. 1,00,000$$

$$Rs. 1,20,000$$

Solution

Question 7

Both (a) and (b) are true

Both (a) and (b) are false

(a) is true but, (b) is false

(a) is false but, (b) is true

Solution

Question 8

Operating Profit Ratio

Capital gearing

Solvency ratio

Stock turnover ratio

Solution

Question 9

Debt-Equity ratio

Net Profit ratio

Current ratio

Accounting ratio

Solution

Question 10

Risk

Liability

Uncertainity

Innovation

Solution

User

Question Analysis

My Perfomance

Score

-

Rank

-

Results Announcement on: coming Monday

Stay Tuned: We’ll update you on your result via email or SMS.