This quiz works best with JavaScript enabled. Home > Accounting > Financial Statement Analysis > Financial Statement Analysis – Quiz 20 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Statement Analysis Quiz 20 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. All of the following are included in the Statement of Financial Position, except for? A) Profit. B) Vehicle. C) Vehicle expenses. D) Capital. Show Answer Correct Answer: C) Vehicle expenses. 2. Why is the price-earnings (P/E) ratio considered important in financial analysis? A) It is used to determine the company's marketing strategy. B) It has no impact on the company's performance. C) It is only relevant for small businesses. D) It provides insight into the valuation of a company's stock and its potential for future growth. Show Answer Correct Answer: D) It provides insight into the valuation of a company's stock and its potential for future growth. 3. Which category of ratios helps answer the question 'Can we make required payments?' A) Liquidity ratios. B) Asset management ratios. C) Debt management ratios. D) Profitability ratios. Show Answer Correct Answer: A) Liquidity ratios. 4. At the end of FY, the inventory holding level of a unit has increased from 69 days to 103 days. What could be the possible reasons for substantial increase in the inventory holding level? A) The unit had procured raw material in bulk to complete the orders. B) The unit was holding the substantial amount of finished goods, waiting for clearance from the buyers to dispatch the material. C) The unit has bought substantial amount of raw material in the month of march as the prices are going upside. D) All the above. Show Answer Correct Answer: D) All the above. 5. The definition of Current Assets & Current Liabilities are available in? A) Accounting Standards. B) RBI Master Circular. C) Companies Act 2013. D) No where available, current assets are to be identified as per prevailing practice. Show Answer Correct Answer: C) Companies Act 2013. 6. Generally, a corporation is owned by its: A) Managers. B) Board of Directors. C) Shareholders. D) All of the above. Show Answer Correct Answer: C) Shareholders. 7. Asset turnover measures A) How often a company replaces its assets. B) How efficiently a company uses its assets to generate sales. C) The portion of the assets that have been financed by creditors. D) The overall rate of return on assets. Show Answer Correct Answer: B) How efficiently a company uses its assets to generate sales. 8. Examples may include salaries, utilities, rent, insurance, and office supplies. A) Revenue. B) Expenses. C) Net Income. D) Net Loss. Show Answer Correct Answer: B) Expenses. 9. The long term surplus / deficit in a funds flow statement depicts? A) Profitability of the unit. B) Excess Money available at Management disposal. C) Change in Net Working Capital. D) None of the above. Show Answer Correct Answer: C) Change in Net Working Capital. 10. ChaCha Corporation has current assets of RM11, 400, inventories of RM4, 000, and a current ratio of 2.6. What is ChaCha's quick or acid test ratio? A) 1.69. B) 0.54. C) 0.74. D) 1.35. Show Answer Correct Answer: A) 1.69. 11. The two basic measures of liquidity are: A) Inventory turnover and current ratio. B) Current ratio and acid test ratio. C) Gross profit Ratio and operating ratio. D) Current ratio and average collection period. Show Answer Correct Answer: B) Current ratio and acid test ratio. 12. Which of the following ratios assess the firm's ability to pay the debt interest and maturities as they become due? A) Current Ratio. B) Times Interest earned. C) Net Profit Margin. D) Quick Ratio. Show Answer Correct Answer: B) Times Interest earned. 13. The financial statement that reports whether the business earned a profit and also lists the revenues and expenses is called the: A) Balance Sheet. B) Statement of Retained Earnings. C) Statement of Cash Flows. D) Income Statement. Show Answer Correct Answer: D) Income Statement. 14. One borrower is availing various credit facility from various Banks and provided separate securities to each Bank on different terms and conditions. What type of banking arrangement is this? A) Multiple Banking Arrangement. B) Consortium Banking Arrangement. C) Sole Banking Arrangement. D) Any of the above. Show Answer Correct Answer: A) Multiple Banking Arrangement. 15. Share application money (refundable) is shown as A) Other long-term liabilities. B) Other current liabilities. C) Short-term provisions. D) Short-term borrowings. Show Answer Correct Answer: B) Other current liabilities. 16. A specific example of return is in the insurance industry A) Premium Ratio Only. B) Premium Ratio to Number of Directors. C) Rasio Decidendi. D) Own/ Risk Retention. Show Answer Correct Answer: D) Own/ Risk Retention. 17. Which of the following are part of Financial Statement Analysis? A) Compare the firm against itself through time. B) Compare the firm to other, similar firms. C) Compare firms of different sizes. D) All of the above. Show Answer Correct Answer: D) All of the above. 18. What does a low inventory turnover ratio suggest about a company's operations? A) The company is efficiently managing its inventory and has no excess or obsolete inventory. B) The company is not efficiently managing its inventory and may have excess or obsolete inventory. C) The company is experiencing high demand for its products and is selling inventory quickly. D) The company is not managing its inventory well and has a shortage of inventory. Show Answer Correct Answer: B) The company is not efficiently managing its inventory and may have excess or obsolete inventory. 19. A measure of asset utilization is A) Sales divided by working capital. B) Return on total assets. C) Return on equity capital. D) Operating profit divided by sales. E) None of the options are correct. Show Answer Correct Answer: B) Return on total assets. 20. Marketable Securities will appear under? A) Investment. B) Fixed Assets. C) Non Quick Assets. D) Quick Assets. Show Answer Correct Answer: D) Quick Assets. ← PreviousNext →Related QuizzesAccounting QuizzesFinancial Statement Analysis Quiz 1Financial Statement Analysis Quiz 2Financial Statement Analysis Quiz 3Financial Statement Analysis Quiz 4Financial Statement Analysis Quiz 5Financial Statement Analysis Quiz 6Financial Statement Analysis Quiz 7Financial Statement Analysis Quiz 8Financial Statement Analysis Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books