Practice Numerical Problems (1.8.4) - Ratio Analysis

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8 questions

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2 cards from this section. Quick, good the night before a test.
Exercise
6 questions · about 4 min · pass mark 70%. Hints available.
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Quiz
2 questions · about 1 min · pass mark 70%. Hints available.
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6 sample questions

Question 1.
What is the formula for the Current Ratio?
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Recall the components of current assets and liabilities.
Question 2.
Define EPS.
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Think about what EPS indicates to investors.
3Question 3.
What does the Current Ratio measure?
- Short-term liquidity
- Long-term debts
- Investments
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Think about how quickly a business can access cash.
4Question 4.
True or False: The Quick Ratio includes inventory in its calculation.
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Consider why a company might not want to include inventory.
Question 5.
A company has Current Assets at ₹250,000, Inventory at ₹50,000, and Current Liabilities at ₹100,000. Calculate both the Current Ratio and Quick Ratio.
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Remember to separate Quick Assets from Current Assets for calculating the Quick Ratio.
Question 6.
Calculate the Return on Capital Employed given a Net Profit before Interest and Tax of ₹120,000 and Capital Employed of ₹600,000.
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Use the ROCE formula carefully!

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