Deck 2: Financial Ratio Analysis

Question 1

Expressed as a percentage of each asset to total

A)Common size P/L A/C
B)Common size Balance Sheet
C)Comparative Income Statement
D)Trend analysis

Answer 1

Common size Balance Sheet

Question 2

Ratios of different items for various periods are calculated and compared

A)Common size
B)Comparative
C)Trend analysis
D)Ratio analysis

Answer 2

Ratio analysis

Question 3

Yard stick which measures relationship between two variables

A)Financial statements
B)Ratio
C)Fund Flow analysis
D)Cash flow analysis

Answer 3

Ratio

Question 4

The ratio which depicts the relationship between two items,one of which is drawn from the Balance Sheet and the other from the revenue account

A)Current ratio
B)Equity Ratio
C)Net Profit ratio
D)Debtors Turn over Ratio

Question 5

The ratio of liquid asset to current liabilities

A)Quick ratio
B)Current ratio
C)Absolute liquid ratio
D)Combined ratio

Question 6

Equity includes --------------

A)Equity share capital
B)Equity share capital+Preference share capital+-fictitious asset
C)Equity capital+Prefernce share capital+reserves snd surplus-fictious asset
D)Equity capital+Preference share capital

Question 7

The ratio which shows the relationship b/w share holder's fund and total assets

A)Debit equity ratio
B)Proprietary ratio
C)Solvency ratio
D)Fixed asset

Question 8

Long term solvency of a firm can be measured by

A)Current ratio
B)Net profit ratio
C)Gross profit ratio
D)Debt equity ratio

Question 9

The ratio that shows the relationship between fixed asset to share holders fund

A)Fixed asset to net worth
B)Fixed asset ratio
C)Fixed assets turn over ratio
D)Net worth ratio

Question 10

The index of efficiency and profitability of the business

A)Operating ratio
B)Operating profit ratio
C)Expense ratio
D)Net profit ratio

Question 11

The ratio that includes whether investment in inventory is efficiently used or not

A)Inventory turnover ratio
B)Working capital turn over ratio
C)Fixed asset turn over ratio
D)Activity ratio

Question 12

Comparison and interpretation of ratio is known as ---------------------

A)Fund flow analysis
B)Cash flow analysis
C)Ratio analysis
D)Trend analysis

Question 13

Powerful tool for analyzing financial statement is ----------

A)Trend analysis
B)Ratio analysis
C)Analysis
D)Interpretation

Question 14

The relationship between two amount or variables is measured with the help of ------------

A)Ratio
B)Trend
C)Comparative
D)Common size

Question 15

The main aim of the ratio analysis is to help the ----------of the firm

A)Owners
B)Officials
C)Departments
D)Management

Question 16

Ratios indicate trends in important items and this helps in -----------

A)Forecasting
B)Reporting
C)Analyzing
D)Interpreting

Question 17

Ratios help the management in evolving market strategies through -----------

A)Inter firm comparison
B)Intra firm comparison
C)Ratios
D)None of the above

Question 18

Ratios may be used as a measure of -------------

A)Effiency
B)Solvency
C)Profitability
D)None of the above

Question 19

An example of Balance Sheet ratio is ---------------

A)Net profit ratio
B)Inventory turn over ratio
C)Current ratio
D)Fixed asset turn over ratio

Question 20

Income statement ratios are also called -----------

A)Operating ratio
B)Liquidity ratio
C)Activity ratio
D)Trend ratio

Question 21

Leverage ratios are also known as -------------- ratios

A)Short term solvency ratios
B)Long term solvency ratios
C)Solvency ratio
D)Liquidity ratio

Question 22

The ratios that shows tha capacity of the business unit to meet its short term obligation out of its short term resources is known as --------------

A)Solvency ratio
B)Leverage ratio
C)Liquidity ratio
D)Trend Ratio

Question 23

The ratio that highlight the end result of business activities are known as ---------------- ratios

A)Liquidity
B)Leverage
C)Activity
D)Profitability

Question 24

The efficiency of the management can be measured with the help of ------------------

A)Activity ratio
B)Leverage ratio
C)Liquidity ratio
D)Profitability ratio

Question 25

The ratio of current asset to currnt liability is known as --------------

A)Liquid ratio
B)Current ratio
C)Absolute liquid ratio
D)Turn over ratio