Practice Long Answer Questions (1.8.3) - Ratio Analysis

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9 questions

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6 sample questions

Question 1.
Define liquidity ratios and give one example.
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Think about ratios that indicate financial stability.
Question 2.
What does the Debt-Equity Ratio indicate?
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Consider how a company finances its operations.
3Question 3.
What does the Current Ratio measure?
- Short-term solvency
- Long-term solvency
- Profitability
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Consider what this ratio addresses.
4Question 4.
True or False: The Debt-Equity Ratio indicates how much equity shareholders have in the business.
- True
- False
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Think about capital structure.
5Question 5.
Given the following details, calculate the Inventory Turnover Ratio:
- Cost of Goods Sold: ₹150,000
- Average Inventory: ₹30,000.
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Consider how many times the inventory was sold and replaced.
Question 6.
A company has a Debt-Equity Ratio of 1.5. If the total equity is ₹2,00,000, how much total debt does the company have?
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Think about how to rearrange the ratio to find total debt.

5 more questions in this section. Enroll free to practise them all.