QN01. XYZ Ltd. has earned 8% Return on Total Assets of Rs. 50,00,000 and has a Net Profit Ratio of 5%. Find out the Sales of the firm
- Rs. 4,00,000
- Rs. 2,50,000
- Rs. 80,00,000
- Rs. 83,33,333
Answer
(C)Rs. 80,00,000
QN02. Banks generally prefer Debt Equity Ratio at:
- 1:1
- 1:3
- 2:1
- 3:1
Answer
(C)2:1
QN03. In the balance sheet amount of total assets is Rs.10 lac, current liabilities Rs.5 lac & capital & reserves are Rs.2 lac .What is the debt equity ratio?
- 1;1
- 1.5:1
- 2:1
- none of the above
Answer
(D)none of the above
QN04. Current ratio is 4:1.Net Working Capital is Rs.30,000.Find the amount of current Assets.
- Rs.10,000
- Rs.40,000
- Rs.24,000
- Rs.6,000
Answer
(B)Rs.40,000
QN05. The ideal quick ratio is
- 2:1
- 1:1
- 5:1
- None of the above
Answer
(B)1:1
QN06. Trading & Profit & loss account and balance sheet is prepared from
- Ledger balance
- Cash and bank balances
- Cash book and bank book
- Trial Balance
Answer
(D)Trial Balance
QN07. Financial decision involve;
- Investment, financing and dividend decision
- Investment, financing and sales decision
- Financing, dividend and cash decision
- None of these
Answer
(A)Investment, financing and dividend decision
QN08. ______________ are an estimate of a firm's future income and expenses, based on its past performance, its current circumstances, and its future plans.
- Financial statements
- Profitability statements
- Statements of cash flow
- Forecasts
Answer
(D)Forecasts
QN09. Which of the followings is return paid to shareholders out of profit of a company?
- Profit
- Dividend
- Bonus shares
- Ex-gratia
Answer
(B)Dividend
QN10. A portion of profits, which a company distributes among its shareholders, is known as:
- Dividends
- Retained Earnings
- Capital Gain
- None of the given options
Answer
(A)Dividends
QN11. Planning for future growth is called:
- Capital Budgeting
- Working Capital Management
- Financial Forecasting
- None of the above
Answer
(C)Financial Forecasting
QN12. Short- term financing plans with high liquidity have:
- High return and high risk
- Moderate return and moderate risk
- Low profit and low risk
- None of the above
Answer
(B)Moderate return and moderate risk
QN13. An example of current asset
- Cash
- Debtors
- Marketable securities
- All
Answer
(D)All
QN14. Generally, the most important category on the statement of cash flows is cash flows from
- operating activities
- investing activities
- financing activities
- significant noncash activities
Answer
(A)operating activities
QN15. Which of the following would be added to net income using the indirect method?
- An increase in accounts receivable
- An increase in prepaid expenses
- Depreciation expense
- A decrease in accounts payable
Answer
(C)Depreciation expense
QN16. The degree of solvency of two firms can be compared by measuring
- Net worth
- Tangible Net Worth
- Asset coverage ratio
- Solvency Ratio
Answer
(D)Solvency Ratio
QN17. Which of the following tools and techniques are the most useful to the financial statement analyst?
- Public relations material and pro forma statements prepared by the firm
- Common size financial statements and financial ratios
- The letter to the shareholders and a map
- None of the above
Answer
(B)Common size financial statements and financial ratios
QN18. Inventory Turnover measures the relationship of inventory with:
- Average Sales
- Cost of Goods Sold
- Total Purchases
- Total Assets
Answer
(B)Cost of Goods Sold
QN19. Which of the following statements is correct?
- A Higher Receivable Turnover is not desirable
- Interest Coverage Ratio depends upon Tax Rate
- Increase in Net Profit Ratio means increase in Sales
- Lower Debt-Equity Ratio means lower Financial Risk
Answer
(D)Lower Debt-Equity Ratio means lower Financial Risk
QN20. Ratio Analysis can be used to study liquidity, turnover, profitability, etc. of a firm. What does Debt-Equity Ratio help to study?
- Solvency
- Liquidity
- Profitability
- Turnover
Answer
(A)Solvency
