Which of the following is NOT a source of Return on Equity (ROE)?

• A) Leverage
• B) Sales per total assets
• C) Return on assets
• D) Book value per share

When intrinsic value of a security is higher then current market price,the investor should:

• A) Ignore the opportunity
• B) Hold till maturity
• C) Purchase the security
• D) Sell the security

Which of the following statements strips away all of the non-cash accounting items and tells you how much actual money the company has generated?

• A) Income Statement
• B) Cash Flow Statement
• C) Balance Sheet
• D) Statement of Owner’s Equity

Net sales of ABC Company are Rs. 1,500,000, Net profit is Rs. 600, 000. What will be the net profit margin?

• A) 40%
• B) 56%
• C) 46%
• D) 50%

Total sales for company are Rs.1,000,000, out of which credit sales are Rs.200,000. Cost of goods sold is Rs.450,000. What will be gross profit for the company?

• A) Rs.350,000
• B) Rs.450,000
• C) Rs.250,000
• D) Rs.550,000

Which of the following highlights expense control, asset utilization and debt utilization?

• A) DuPont analysis
• B) Qualitative analysis
• C) Financial modeling analysis
• D) Quantitative analysis

Which of the following is considered as the most basic current asset?

• A) Inventory
• B) Cash
• C) Cash equivalents
• D) Marketable securities

_______ is a liability payable within one year.

• A) Notes payable
• B) Debentures
• C) Account payable
• D) Bonds

Which one of following statements is true if intrinsic value of a security is higher than its current market price?

• A) The security is being undervalued
• B) None of given options
• C) The security is correctly valued
• D) The security is being overvalued

Which of the following ratios are used to measure a company's capital structure?

• A) Leverage ratio
• B) Debt coverage ratio
• C) Price to sales ratio
• D) Price to book value ratio

Which of the following is the formula of earning per share?

• A) EPS=IRR / Market value per share
• B) EPS=ROE * Book value per share
• C) EPS=NPV * Retained earning value per share
• D) EPS=ROE * Net asset value per share

In which of the following conditions the price earning ratios will be low?

• A) When revenue and expense rates are moderate
• B) When inflation and interest rates are high
• C) When conversion and exchange rates are low
• D) When insurance and tax rates are equivalent

There is _________ relationship between P/E ratio and interest rates.

• A) Direct
• B) Inverse
• C) Linear
• D) No

Which of the following statements record performance over a period of time?

• A) Balance sheet and income statement
• B) Cash flow and statement of owner’s equity
• C) Cash flow and income statements
• D) Cash flow statement and balance sheet

Which of the following take place at the expansion stage of the industry life cycle?

• A) Firm operations get more stable and dependable
• B) No rapid growth in demand
• C) Sales growth decline as new products are developed
• D) Costs get stable rather than decreasing or increasing

Which of the following is a tangible asset with useful life of more than one year?

• A) Furniture
• B) All of the given options
• C) Building
• D) Land

Mr. A has sold 500 shares for Rs.600, 000 which he has bought two years ago for Rs.590, 000. What will be capital gain in this case?

• A) Rs.10,000
• B) Rs.200, 000
• C) Rs.100, 000
• D) Rs.20, 000

Which one of the following is correct formula for calculating gross margin?

• A) Net Profit/Net Sales
• B) Net income/Net Sales
• C) Gross Profit/credit Sales
• D) Gross Profit/Net Sales

ABC Company Ltd. has worth of $51 million. What is another term used for this?

• A) Book value
• B) Cost per share
• C) Market value
• D) Earning per share

Which of the following take place at the declining stage of the industry life cycle?

• A) Rapid growth in demand and subsequent profits occur
• B) Sales growth decline as new products are developed
• C) Firm operations get more stable and dependable
• D) Costs get stable rather than decreasing or increasing