1. Which of the following cannot be used to analyse financial statements?

A. Liquidity ratios

B. Solvency ratios

C. Profitability ratios

D. None of the above

2. This is the availability of resources to meet short term cash requirements.

A. Liquidity

B. Solvency

C. Profitability

D. None of the above

3. This is the excess of current assets over current liabilities

A. Working Capital

B. Current ratio

C. Acid Test ratio

D. Quick ratio

4. Which of the following is not considered as quick assets?

A. Cash

B. Inventory

C. Accounts Receivable

D. None of the above

5. Which of the following is considered as quick assets?

A. Prepaid asset

B. Trading securities

C. Both A & B

D. None of the above

6. This measure the frequency of accounts receivable converted into cash.

A. Accounts receivable turnover ratio

B. Average collection period

C. Both A & B

D. None of the above.

7. This is the entity's ability to meet long term obligations as they become due.

A. Liquidity

B. Solvency

C. Profitability

D. None of the above

8. This compares the liabilities of the company with its equity.

A. Debt to total assets ratio

B. Debt to equity ratio

C. Both A & B

D. None of the above

9. Is the quotient of the current assets divided by the current liabilities of the company?

A. Current ratio
B. Working capital ratio

C. Both A & B

D. None of the above

10. This ratio measures the proportion between the net income after tax and the net sales of the
company.

A. Profit margin ratio

B. Gross profit ratio

C. Both A & B

D. None of the above

11. This measures the capability of an entity to pay long term obligations as they fall due.

A. Debt to equity ratio

B. Solvency ratio

C. Both A & B

D. None of the above

12. This ratio measures the frequency of conversion of the company's accounts receivable to cash.

A. Acid Test ratio

B. Accounts receivable turnover ratio

C. Accounts payable turnover ratio

D. None of the above

13. This ratio measures the number of times the company was able to sell its entire inventory to
customers during the year.

A. Inventory turnover ratio

B. Average days in inventory

C. Number of days in operating cycle

D. None of the above

14. This is the proportion between the total liabilities of the company and its total assets.

A. Debt to equity ratio

B. Times interest earned ratio

C. Debt to total assets ratio

D. None of the above

15. This is the proportion of the gross profit of the company with its net sales.

A. Profit margin ratio

B. Gross profit ratio

C. Both A & B

D. None of the above