When the concept of ratio is defined in respect to the item shown in the
financial statements, it is termed as
A.
Accounting ratio
B.
Financial ratio
C.
costing ratio
D.
none of the above
Answer»
B. Financial ratio
2.
The relationship between two financial variables can be expressed in:
A.
Pure ratio
B.
Percentage
C.
Rate or time
D.
all the above
Answer»
D. all the above
3.
Stock is considered as a liquid asset as anytime it can be converted into cash immediately.
A.
Yes
B.
No
C.
Only YES
D.
None of the above
Answer»
B. No
4.
Return on properties funds is also known as.
A.
Return on net worth
B.
Return on shareholders fun
C.
Return on the shareholders investment
D.
All the above
Answer»
D. All the above
5.
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 ?
A.
13 %
B.
28%
C.
26%
D.
20%
Answer»
D. 20%
6.
Liquid asset is determined by
A.
Current asset - stock - prepaid expense
B.
Current asset + Stock +prepaid expense
C.
Current asset + prepaid expense
D.
None of the above
Answer»
A. Current asset - stock - prepaid expense
7.
Which of the following is not included in current assets.
A.
Debtors
B.
Stock
C.
Cash at bank
D.
Cash in hand
Answer»
B. Stock
8.
Liquidity ratios are expressed in
A.
Pure ratio form
B.
Percentage
C.
Rate or time
D.
None of the above
Answer»
A. Pure ratio form
9.
Working capital turnover ratio can be determined by :
A.
( Gross profit / Working capital )
B.
( Cost of goods sold / Net sales )
C.
( Cost of goods sold / Working capital)
D.
None of the above
Answer»
A. ( Gross profit / Working capital )
10.
Determine Working capital turnover ratio if, Current asset is Rs 1,50,000, current liability is Rs 1,00,000 & cost of goods sold is Rs 3,00,000.
A.
5 times
B.
6 times
C.
3 times
D.
1.5 times
Answer»
B. 6 times
11.
The ratio analysis is helpful to management in taking several decisions, but as
a mechanical substitute for judgement and thinking, it is worse than useless.
A.
True
B.
False
C.
may be false
D.
both a and b
Answer»
A. True
12.
Profit for the objective of calculating a ratio may be taken as
A.
Profit before tax but after interest
B.
Profit before interest &tax
C.
Profit after interest & tax
D.
All the above
Answer»
D. All the above
13.
If sales is Rs 5,00,000 & net profit is Rs 1,20,000 Net profit ratio is
A.
24%
B.
416%
C.
60%
D.
None of the above
Answer»
A. 24%
14.
General profitability ratios are based on
A.
Investment
B.
Sales
C.
A & B
D.
None of the above
Answer»
B. Sales
15.
Financial Statement Analysis can be used for assessment of past performance
only.
A.
false
B.
true
C.
either true or false
D.
only true
Answer»
A. false
16.
Ratio analysis is an important means of expressing the relationship between two numbers.
A.
true
B.
false
C.
may be false
D.
a and b both
Answer»
A. true
17.
Ratio analysis helps in investment decision.
A.
true
B.
false
C.
may be true
D.
a & b both
Answer»
A. true
18.
Liquid Ratio is also known as 2:1 ratio.
A.
false
B.
true
C.
either true or false
D.
none of the above
Answer»
A. false
19.
Current ratio indicates the solvency position of the business.
A.
true
B.
false
C.
may be false
D.
a and b
Answer»
A. true
20.
An ideal Liquid ratio is considered as 1:1
A.
true
B.
false
C.
a and b both
D.
none of the above
Answer»
A. true
21.
The gross profit represents the net margin.
A.
false
B.
true
C.
both a and b
D.
may be false
Answer»
A. false
22.
Reliability of ratios depend upon the reliability of financial data.
A.
true
B.
false
C.
only a
D.
both a and b.
Answer»
A. true
23.
Ratio analysis ensures effective cost control.
A.
true
B.
false
C.
none of the above
D.
may be both
Answer»
A. true
24.
An ideal current ratio is considered as 1:2
A.
false
B.
true
C.
may be true
D.
both a and b
Answer»
A. false
25.
The ratios which reveal the final result of the managerial policies and performance is…………..
A.
turnover ratios.
B.
profitability ratios.
C.
short term solvency ratio.
D.
long term solvency ratio.
Answer»
B. profitability ratios.
26.
Return on investment is a .
A.
turnover ratios.
B.
short term solvency ratio.
C.
profitability ratios.
D.
long term solvency ratio.
Answer»
C. profitability ratios.
27.
Net profit ratio is a .
A.
turnover ratio.
B.
long term solvency ratio.
C.
short term solvency ratio
D.
profitability ratio.
Answer»
D. profitability ratio.
28.
Stock turnover ratio is a .
A.
turnover ratio.
B.
profitability ratio.
C.
short term solvency ratio.
D.
long term solvency ratio.
Answer»
A. turnover ratio.
29.
Current ratio is a
A.
short-term solvency ratio.
B.
long-term solvency ratio.
C.
profitability ratio.
D.
turnover ratio.
Answer»
A. short-term solvency ratio.
30.
Proprietary ratio is a .
A.
short-term solvency ratio.
B.
long-term solvency ratio.
C.
profitability ratio.
D.
turnover ratio.
Answer»
B. long-term solvency ratio.
31.
Fixed assets ratio is a
A.
short-term solvency ratio.
B.
long-term solvency ratio.
C.
profitability ratio.
D.
turnover ratio.
Answer»
B. long-term solvency ratio.
32.
Fixed assets turnover ratio is a
A.
short-term solvency ratio.
B.
long-term solvency ratio.
C.
profitability ratio.
D.
turnover ratio.
Answer»
D. turnover ratio.
33.
The ratio which measures the profit in relation to capital employed is known as
A.
return on investment.
B.
gross profit ratio.
C.
operating ratio.
D.
operating profit ratio.
Answer»
A. return on investment.
34.
The ratio which determines the profitability from the shareholder’s point of
view is .
A.
return on investment.
B.
gross profit ratio.
C.
return on shareholders funds.
D.
operating profit ratio.
Answer»
C. return on shareholders funds.
35.
Return on equity is also called
A.
return on investment.
B.
gross profit ratio.
C.
return on shareholders funds.
D.
return on net worth.
Answer»
D. return on net worth.
36.
Preliminary expenses is an example of
A.
fixed assets.
B.
current assets.
C.
fictitious assets.
D.
current liabilities.
Answer»
C. fictitious assets.
37.
Prepaid expenses is an example of .
A.
fixed assets.
B.
current assets.
C.
fictitious assets.
D.
current liabilities.
Answer»
B. current assets.
38.
The ratio which is calculated to measure the productivity of total assets is
A.
return on equity.
B.
return on share holders funds.
C.
return on total assets.
D.
return on equity share holders’ funds.
Answer»
C. return on total assets.
39.
The ratio which shows the proportion of profits retained in the business out of
the current year’s profits is
A.
retained earnings ratio.
B.
pay out ratio
C.
earnings per share.
D.
price earnings ratio.
Answer»
A. retained earnings ratio.
40.
The ratio which indicates earnings per share reflected by the market price is .
A.
retained earnings ratio.
B.
pay out ratio.
C.
earnings per share.
D.
price earnings ratio.
Answer»
D. price earnings ratio.
41.
The ratio establishes the relationship between profit before interest and tax
and fixed interest charges is .
A.
interest cover ratio.
B.
fixed dividend cover ratio.
C.
debt service coverage ratio.
D.
dividend yield ratio.
Answer»
A. interest cover ratio.
42.
The ratio shows the preference dividend as a proportion of profit available for
shareholders is
A.
interest cover ratio.
B.
fixed dividend cover ratio.
C.
debt service coverage ratio.
D.
dividend yield ratio.
Answer»
B. fixed dividend cover ratio.
43.
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.
Answer»
D. dividend yield ratio.
44.
Turnover ratio is also known as .
A.
activity ratios.
B.
solvency ratios.
C.
liquidity ratios.
D.
profitability ratios.
Answer»
A. activity ratios.
45.
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.
Answer»
A. stock velocity ratio.
46.
Which ratio is calculated to ascertain the efficiency of inventory management
in terms of capital investment?
A.
stock velocity ratio.
B.
debtors velocity ratio.
C.
creditors velocity ratio.
D.
working capital turnover ratio.
Answer»
A. stock velocity ratio.
47.
The ratio which measures the relationship between the cost of goods sold and
the amount of average inventory is
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