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Analysis of Financial Statements Practice Test: Ratio Analysis
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Analysis of Financial Statements Practice Test: Ratio Analysis
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25 Questions

1. Stock is considered as a liquid asset as anytime it can be converted into cash immediately.
2. Determine stock turnover ratio if, Opening stock is Rs 31,000 , Closing stock is Rs 29,000, Sales is Rs 3,20,000 & Gross profit ratio is 25% on sales.
3. Which ratio measures the number of times the receivables are rotated in a year in terms of sales?
4. Prepaid expenses is an example of .
5. Opening stock + purchases + direct expenses – closing stock =
6. Sales – Gross Profit = .
7. Which of the following statements about liquidity ratios is true?
8. The ratio which is calculated to measure the productivity of total assets is
9. The ratio establishes the relationship between profit before interest and tax and fixed interest charges is
10. What will be the Gross Profit if , total sales is Rs 2,60,000,cost of net goods sold is Rs 2,00,000 & sales return is Rs10,000 ?
11. Creditors turnover ratio is also called
12. The ratio which measures the profit in relation to capital employed is known as
13. The dividend is related to the market value of shares in .
14. Liquidity ratios are expressed in
15. The ratio shows the preference dividend as a proportion of profit available for shareholders is
16. Stock turnover ratio is a .
17. Quick ratio is 1.8:1, current ratio is 2.7:1 and current liabilities are Rs 60,000. Determine value of stock.
18. Which of the following statements are true?
19. When the concept of ratio is defined in respect to the item shown in the financial statements, it is termed as
20. The primary purpose of the liquidity ratios is to determine
21. The ratio which measures the relationship between the cost of goods sold and the amount of average inventory is
22. Fixed assets turnover ratio is a
23. Return on properties funds is also known as.
24. The ________ ratios help determines the degree of financial risk and earnings volatility present in a firm.
25. If sales is Rs 5,00,000 & net profit is Rs 1,20,000 Net profit ratio is

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