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- 1. Multiple ChoiceGross Profit Refers tomoney remaining after all expenses are paidmoney remaining after taxes have been paidSales less cost of goods soldNone of the above
- 2. Multiple ChoiceNet Profit or Net Loss refers toGross Profit + Sales RevenueThe sum of assets and liabilitiesGross Profit - expensesNone of the above
- 3. Multiple Choice
What is the Gross Profit Margin for this business?20%30%25%40% - 4. Multiple ChoiceWhat is the Net Profit Ratio for this business?17%30%22%18%
- 5. Multiple ChoiceWhat is the Return on Capital Employed for this business?10%10.5%11%18%
- 6. Multiple ChoiceHow can a business improve the Gross Profit Margin?Finding a cheaper supplierLowering wagesLowering the cost of electricityAll of the above are correct
- 7. Multiple ChoiceHow can a business improve the Net Profit Margin?Finding a more expensive supplier with better qualityReducing the wage billRaising electricity usageNone of the above
- 8. Multiple ChoiceFinancial ratios are used in comparison of other like businesses?TrueFalse
- 9. Multiple ChoiceIt is better to have a lower NP than the industry average?TrueFalse
- 10. Multiple ChoiceThe Return on Capital Employed is considered to be good if...the return is greater than the sum total of Net Assetsthe return is less than the bank interest ratethe return is equal to the bank interest ratethe return is greater than the bank interest rate
- 11. Multiple ChoiceWhat is a current asset?Something a firm owes that must be paid in > 1 year.Something a firm owns that can turn into cash in > 1 year.Something a firm owns that you can turn into cash <1 year.None of the above
- 12. Multiple ChoiceWhat is a current liability?Something a firm owns that can be turned into cash <1 year.Something a firm owns that can be turned into cash >1 year.Something a firm owes that must be paid <1 year.Something a firm owes that must be paid >1 year.
- 13. Multiple ChoiceWhat is the current ratio?Non Current Assets: Non Current LiabilitiesCurrent Assets: Non Current LiabilitiesNon Current Assets: Current LiabilitiesCurrent Assets:Current Liabilities
- 14. Multiple ChoiceWhat does the current ratio show us?How many current assets a firm hasA measure of a firms ability to meet short term liabilitiesHow many current liabilities a firm owesHow much debt a firm owes
- 15. Multiple ChoiceWhat is removed from the current ratio to make it an acid test ratio?StockDebtorsCreditorsBank
- 16. Multiple ChoiceCurrent assets of £8m (£4m is stock) & Current Liabilities of £2m. What is their current ratio?1:24:12:11:4
- 17. Multiple ChoiceCurrent assets of £8m (£4m is stock) & Current Liabilities of £2m. What is the Acid Test ratio?1:24:12:11:4
- 18. Multiple ChoiceWhat is the ideal value for current ratio?1:21:11.5:10.5:1
- 19. Multiple ChoiceWhat is the ideal value for the acid test ratio?1:21:12:10.5:1
- 20. Multiple ChoiceHow can you improve the current ratio?Manage debtsSeek long term financeReduce investmentsAll of the above
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