Which of the following ratio is calculated in order to know the liquidity of the trade debtors?

• A) Defensive interval ratio
• B) Total Asset Turnover ratio
• C) Accounts receivables turnover
• D) Operating cycle

In the vertical analysis of income statement, all the accounts are expressed as a percentage of which of the following?

• A) Net sales
• B) Gross sales
• C) Net income
• D) Total expenses

Which group of ratios relates the financial charges of a firm to its ability to service them?

• A) Coverage ratios
• B) Liquidity ratios
• C) Debt ratios
• D) Profitability ratios

Return on Sales is also known as which of the following?

• A) Firm's return on total assets
• B) Firm's return on investment
• C) Firm's operating profit margin
• D) Firm's gross profit margin

To financial analysts, "working capital" means the same thing as which of the following?

• A) Total assets
• B) Fixed assets
• C) Current assets
• D) Current assets minus current liabilities

Ratio analysis may be undertaken to study liquidity, turnover, profitability, and other indicators. To which does the current ratio most relate?

• A) Solvency
• B) Stability
• C) Liquidity
• D) Profitability

If a firm has Rs. 100 in inventories, a current ratio equal to 2:1, and a quick ratio equal to 1:1, what is the firm's Net Working Capital?

• A) Rs. 200
• B) Rs. 1,000
• C) Rs. 100
• D) Rs. 0

Which of the following represent the length of time from the commitment of cash for purchases until the collection of receivables resulting form the sale of services?

• A) Accounting cycle
• B) Cash cycle
• C) Operating cycle
• D) Cash conversion cycle

Which of the following is NOT a form of financial analysis?

• A) Trend analysis
• B) Ratio analysis
• C) Du Pont analysis
• D) SWOT Analysis

Earnings per share, return on sales, and return on equity are all examples of which of the following?

• A) Liquidity ratios
• B) Turnover ratios
• C) Leverage ratios
• D) Profitability ratios

Which of the following indicates the relative size of each item included in a total?

• A) Relative percentages
• B) Both trend and component percentages
• C) Trend percentages
• D) Component percentages

The term "factoring" refers to which of the following?

• A) Selling all accounts receivable to different companies
• B) Paying all notes payable when they come due
• C) Selling accounts receivable to a particular company
• D) Paying all accounts payable at the end of the year

A company has declared and paid a cash dividend of Rs. 1 million among the share holders. What will be its effect on the net working capital of the company?

• A) Decrease
• B) Depends upon the situation
• C) No effect
• D) Increase

Companies that have low gross profit rates often need which type of inventory turnover rate in order to operate profitably?

• A) High inventory turnover
• B) High seasonal inventory turnover
• C) Inventory turnover equal to industry average
• D) Low inventory turnover

Which of the following would NOT improve the current ratio?

• A) Sell common stock to reduce current liabilities
• B) Sell fixed assets to reduce accounts payable
• C) Issue long-term debt to buy inventory
• D) Borrow short term to finance additional fixed assets

The gross profit margin is unchanged, but the net profit margin declined over the same period. When this could have happened?

• A) Cost of goods sold increased relative to sales
• B) The tax rate has increased
• C) Sales increased relative to expenses
• D) Dividends were decreased

Nishat Corporation had net income of Rs. 100,000, paid income taxes of Rs. 30,000, and had interest expense of Rs. 8,000. What was Nishat's times interest earned ratio?

• A) 12.5
• B) 16.25
• C) 17.85
• D) 17.25

Which group of ratios relates gain on sales and investment?

• A) Liquidity ratios
• B) Profitability ratios
• C) Debt ratios
• D) Coverage ratios

A company can improve (lower) its debt-to-total asset ratio by doing which of the following?

• A) Borrow more
• B) Shift short-term debt to long-term debt
• C) Sell common stock
• D) Shift long-term debt to short-term debt

ABC company Ltd has 40% debt-to-total assets ratio. What is its debt-to-equity ratio?

• A) 40%
• B) 20%
• C) 60%
• D) 66.67%