ACCOUNTING RATIOS - Assessment

1.

Multiple Choice

30 sec

1 pt

What is the accounting standard governing accounting ratios?

IAS 2

IFRS3

IFRS 10

There is no standards for ratios

2.

Multiple Choice

30 sec

1 pt

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

1 min

1 pt

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

45 sec

1 pt

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

45 sec

1 pt

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

30 sec

1 pt

What is the optimum ratio suggested for current ratio?

1:1

1:2

4:1

2:1

7.

Multiple Choice

30 sec

1 pt

What is the optimum ratio suggested for acid test ratio?

1:2

1:1

3:1

100:1

8.

Multiple Choice

30 sec

1 pt

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

30 sec

1 pt

Gearing ratio and interest cover are normally used to measure.......

Profitability

Earnings capability

Long Term Risk

Short term Rick

10.

Multiple Choice

30 sec

1 pt

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

30 sec

1 pt

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

45 sec

1 pt

This ratio measures the confidence of the equity shareholders in the business...

PE ratio

EPS

Dividend yield

Dividend cover

13.

Multiple Choice

30 sec

1 pt

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

30 sec

1 pt

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

30 sec

1 pt

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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