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- 1. Multiple Choice
What is the accounting standard governing accounting ratios?
IAS 2
IFRS3
IFRS 10
There is no standards for ratios
- 2. Multiple Choice
What are the factors affecting Gross profit margin calculation?
Changes in selling prices
Changes in cost prices
Changes in sales volume
All the above
- 3. Multiple Choice
The expenses to sales ratios for a business improved over the years. Which one of the below action most probably done to achieve the above results?
Reduction in distribution costs
Tax rebates
Repayment of loans
None of the above
- 4. Multiple Choice
what is the definition of capital employed for public limited companies?
Equity Capital + Reserves
Equity capital+ PSC + Reserves
Equity capital+PSC+Reserves+NCL
Equity Capital only
- 5. Multiple Choice
The following ratio is affected by Net Profit Margin and Asset Turnover....
Returns on equity
ROCE
Returns on shareholders fund
None of the above
- 6. Multiple Choice
What is the optimum ratio suggested for current ratio?
1:1
1:2
4:1
2:1
- 7. Multiple Choice
What is the optimum ratio suggested for acid test ratio?
1:2
1:1
3:1
100:1
- 8. Multiple Choice
The following are the ratios to access the short term liquidity of business except....
Current Ratio
Quick ratio
Receivable Collection period
Interest Cover
- 9. Multiple Choice
Gearing ratio and interest cover are normally used to measure.......
Profitability
Earnings capability
Long Term Risk
Short term Rick
- 10. Multiple Choice
In order to calculate the EPS, the shares to be used must be......
Equity and preference shares
Preference shares only
Equity shares only
None of the above
- 11. Multiple Choice
The following are the consequences for the business of having very low liquidity except.......
Production bottleneck
Lost customer goodwill
Skilled employee resign
Increase in sales
- 12. Multiple Choice
This ratio measures the confidence of the equity shareholders in the business...
PE ratio
EPS
Dividend yield
Dividend cover
- 13. Multiple Choice
This ratio measures the amount of profit after tax can cover the finance cost payment.....
GP margin
Asset turnover
Interest margin
Interest cover
- 14. Multiple Choice
This ratio measures the amount of operating profit earned for every $1 capital employed. Normally it should be above the governments yield....
Returns on assets
ROCE
ARR
NPV
- 15. Multiple Choice
The following are the advantages of ratio analysis except...
Simple and easy to understand by non accountants
Very cost effective as ready made FS available
Can use user friendly tools such as Excel
The only best method to analyse business performance
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