Question 1

The dividend is related to the market value of shares in .
A)interest cover ratio.
B)fixed dividend cover ratio.
C)debt service coverage ratio.
D)dividend yield ratio.

Accepted Answer

The dividend yield ratio shows the relationship between the dividend per share a company pays out to its shareholders and the market value per share, making it a measure of the return on investment for shareholders.

Question 2

Turnover ratio is also known as .
A)activity ratios.
B)solvency ratios.
C)liquidity ratios.
D)profitability ratios.

Accepted Answer

Turnover ratios, also known as activity ratios, measure how efficiently a company uses its assets to generate sales or revenue. These ratios are crucial for assessing the operational efficiency of a business.

Question 3

Inventory or stock turnover ratio is also called .
A)stock velocity ratio.
B)debtors velocity ratio.
C)creditors velocity ratio.
D)working capital turnover ratio.

Accepted Answer

The inventory or stock turnover ratio is also referred to as the stock velocity ratio, which measures how quickly inventory is sold or used over a given period.

Question 4

The ratio which measures the relationship between the cost of goods sold and the amount of average inventory is
A)stock turnover ratio.
B)debtors velocity ratio.
C)creditors velocity ratio.
D)working capital turnover ratio.

Accepted Answer

The stock turnover ratio, also known as inventory turnover ratio, measures the relationship between the cost of goods sold and the amount of average inventory. It indicates how efficiently a company manages its inventory by turning it into sales.

Question 5

Sales - Gross Profit = .
A)net profit.
B)administrative expenses.
C)cost of production.
D)cost of goods sold.

Accepted Answer

Gross profit is calculated by subtracting the cost of goods sold from sales.

Quiz 4: Financial Statement Analysis and Ratios: Part B

The dividend is related to the market value of shares in .

Turnover ratio is also known as .

Inventory or stock turnover ratio is also called .

The ratio which measures the relationship between the cost of goods sold and the amount of average inventory is

Sales - Gross Profit = .