Practice Practice Questions (1.8) - Ratio Analysis

Practise this section

8 questions

Flashcard drill
2 cards from this section. Quick, good the night before a test.
Exercise
6 questions · about 4 min · pass mark 70%. Hints available.
Sign up to start the exercise
Quiz
2 questions · about 1 min · pass mark 70%. Hints available.
Sign up to start the quiz

6 sample questions

Question 1.
What is the formula for the Quick Ratio?
Show hintHide hint
Remember, Quick Assets exclude Inventory.
Question 2.
Name any two types of liquidity ratios.
Show hintHide hint
Think of ratios focusing on short-term financial health.
3Question 3.
What does the Current Ratio measure?
- Long-term financial strength
- Short-term financial obligations
- Overall profitability
Show hintHide hint
Consider what short-term obligations entail.
4Question 4.
True or False: The Net Profit Ratio indicates how much of sales is profit.
- True
- False
Show hintHide hint
Recall how net profit is calculated.
Question 5.
A company has the following financial figures: Current Assets: ₹250,000; Inventory: ₹50,000; Current Liabilities: ₹100,000. Calculate the Current Ratio and Quick Ratio.
Show hintHide hint
Remember to calculate Quick Ratio by excluding inventory.
Question 6.
If a company has a net profit of ₹90,000 and total equity of ₹500,000, what is the Return on Equity (RoE)?
Show hintHide hint
Think about the percentage of net profit relative to shareholders' equity.

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