Statement Analysis Tools and Accounting Ratios Test

Result

Statement Analysis Tools and Accounting Ratios Test - 24

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

Which accounting ratio will be useful in indicating the inability to pay interest?

A
Debt-equity ratio

B
Debt-service coverage ratio

C
Interest coverage ratio

D
None of the above
Question 2
1 / -0

If total current liabilities are increased but total current assets remain unchanged then the Current Ratio will ___________.

A
Improve

B
Decline

C
No Effect

D
Both (A) and (B)
Question 3
1 / -0

Calculate proprietary ratio, from the following information:
Total external liabilities = Rs. 5,00,000
Balance sheet total = Rs. 10,10,000
Current liabilities = Rs. 1,00,000
Fictitious assets = Rs. 10,000

A
0.556

B
0.540

C
0.528

D
0.518

Solution

Long-term debt = Total external liabilities - current liabilities
= Rs. 5,00,000 - Rs. 1,00,000
= Rs. 4,00,000
Total non-fictitious assets = Total assets - Fictitious assets
= Rs. 10,10,000 - Rs. 10,000
= Rs. 10,00,000
Shareholders funds = Non-fictitious total assets - Total liabilities
= Rs. 10,00,000 - Rs. 5,00,000
= Rs. 5,00,000
Net assets = Total non-fictitious assets - Current liabilities
= Rs. 10,00,000 - Rs. 1,00,000
= Rs. 9,00,000
Proprietary ratio = Shareholders funds/ Capital employed
= Rs. 5,00,000/Rs. 9,00,000
= 0.556
Question 4
1 / -0

Which of the following transaction change the current ratio?

A
Purchase of goods for cash

B
Plant acquire on account

C
Sold goods on credit

D
Debentures converted into equity capital

Solution

When plant is acquired on account the fixed asset would increase and there would be increase in the creditors amount, hence the current ratio would decrease. When goods are sold on credit the stock would decrease and the debtors would increase and hence there would be no effect on current ratio.
Question 5
1 / -0

Proprietary ratio express relationship of proprietor's funds to net __________.

A
Liabilities

B
Current assets

C
Assets

D
Current liabilities

Solution

The proprietary ratio is the proportion of shareholders equity to total assets.
It is used to determine the stability and effectiveness of the company's capital structure.
It shows the proportion of the total assets of a company which are financed by the proprietor's funds.
Question 6
1 / -0

Which accounting ratio will be useful in indicating the inability to pay dues to financial institutions?

A
Debt-equity ratio

B
Debt-service coverage ratio

C
Interest coverage ratio

D
Debt-collection period
Question 7
1 / -0

A shareholder who is examining his portfolio and who is to decide whether he should hold or sell his shares in a particular company. In this case, indicate the important accounting ratio that would be used _______________.

A
Current ratio

B
Debt-equity ratio

C
Earning per share

D
None of the above
Question 8
1 / -0

When operating profit ratio $$25\%$$ and Capital Turnover ratio $$2\%$$. What is the return on investment?

A
$$75\%$$

B
$$50\%$$

C
$$25\%$$

D
None of the above

Solution

Return on Investment = Operating Profit Ratio*Capital turn over ratio = $$25\%$$ $$\times$$ $$2\%$$ = $$50\%$$
Question 9
1 / -0

Turnover ratios are also known as __________.

A
Profitability ratios

B
Solvency ratios

C
Financial ratios

D
Efficiency ratios

Solution

Turnover ratios are also referred to as activity ratios or efficiency ratios with which a firm manages its current assets. The following ratios can be calculated to judge the effectiveness of the asset's use.
1. Inventory Turnover Ratio
2. Accounts Receivables Turnover ratio
3. Creditor Turnover Ratio
4. Assets Turnover Ratio
Question 10
1 / -0

Total current assets are increased by Rs.$$50,000$$/- but total current liabilities remain unchanged. In this situation the current ratio will be _____________.

A
Declined

B
Improved

C
Both (A) and (B)

D
No effect

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 - 24

Result

Statement Analysis Tools and Accounting Ratios Test - 24

Score

-

Rank

-

SHARING IS CARING

Question 1

Debt-equity ratio

Debt-service coverage ratio

Interest coverage ratio

None of the above

Question 2

Improve

Decline

No Effect

Both (A) and (B)

Question 3

0.556

0.540

0.528

0.518

Solution

Question 4

Purchase of goods for cash

Plant acquire on account

Sold goods on credit

Debentures converted into equity capital

Solution

Question 5

Liabilities

Current assets

Assets

Current liabilities

Solution

Question 6

Debt-equity ratio

Debt-service coverage ratio

Interest coverage ratio

Debt-collection period

Question 7

Current ratio

Debt-equity ratio

Earning per share

None of the above

Question 8

$$75\%$$

$$50\%$$

$$25\%$$

None of the above

Solution

Question 9

Profitability ratios

Solvency ratios

Financial ratios

Efficiency ratios

Solution

Question 10

Declined

Improved

Both (A) and (B)

No effect

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.