Following are some of the multiple choice questions on the Financial Ratios with answers that will help the students in developing their knowledge.
Financial Ratios MCQ
1. Which of the following methods could a business implement to reduce their expenses
2. Which ratio tells you how effective the management team is at keeping the indirect costs low?
3. What is the formula for Gross Profit Margin?
4. A low Rate of Turnover for Accounts Receivables indicates:
5. What does the Net Profit Ratio show us?
6. The account Cost of Goods sold is considered an expense.
7. Which of the following shows the number of times a firm sells its average inventory balance during a reporting period?
8. Which ratio is a more conservative measure than the current ratio, which includes all current assets as coverage for current liabilities.
9. How do you calculate Gross Profit?
10. Financial ratios that tell how much of each dollar of sales, assets, and owner's investments resulted in net profit.
11. Financial ratios that tell how well a company can pay off its short-term debts and meet unexpected needs for cash.
12. Which of the following is a liquidity ratio?
13. What is the difference between current and non current assets?
14. What does COGS stand for?
15. The sources of money generated by the sale of products or services.
16. The financial statement that reports whether the business earned a profit and also lists the revenues and expenses is called the:
17. What is owner equity?
18. What are the 3 basic financial statements?
19. When it comes to debt, a company is financially stronger when there is more debt and fewer assets.
20. Examples may include salaries, utilities, rent, insurance, and office supplies.
21. What does liquidity mean?
22. How do you decide what assets or liabilities are current?
23. When making business investment decision you should:
24. Which ratio tells you how much profit does a company generate directly from making its goods /services?
25. Which ratio measures how much of each dollar in revenue collected by a company translates into pure profit.
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