This quiz works best with JavaScript enabled. Home > Finance > Accounting > Financial Statement Analysis > Financial Statement Analysis – Quiz 10 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Statement Analysis Quiz 10 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Liabilities means A) Liabilities must pay. B) Long-term liabilities. C) Short-term debt. D) None of above. Show Answer Correct Answer: A) Liabilities must pay. 2. Calculate the debt-to-equity ratio for a company with total debt of $ 1, 000, 000 and total equity of $ 500, 000. A) 2. B) 3. C) 1.5. D) 0.5. Show Answer Correct Answer: A) 2. 3. What does a high debt-to-equity ratio indicate about a company's financial health? A) Strong financial position. B) High profitability. C) Low risk. D) Financial instability. Show Answer Correct Answer: D) Financial instability. 4. Which of the following is a liquidity ratio? A) Days debtors. B) Times debtors turnover. C) Equity ratio. D) Current ratio. Show Answer Correct Answer: D) Current ratio. 5. How do you find Working Capital? A) Current Assets-Owner's Capital. B) Current Assets-Current Liabilities. C) Long Term Assets-Long Term Liabilities. D) Assets-Liabilities. Show Answer Correct Answer: B) Current Assets-Current Liabilities. 6. Cost of Sales can be arrived as? A) Cost of Production + Opening Stock of FG-Closing Stock of FG. B) Cost of Production + SGA Expenses. C) Cost of Production + Non Operating Expenses. D) Cost of Production + Opening Stock of SIP-Closing Stock of SIP. Show Answer Correct Answer: A) Cost of Production + Opening Stock of FG-Closing Stock of FG. 7. Management is a user of financial analysis. Which of the following comments does not represent a fair statement as to the management perspective? A) Management is interested in the view of investors. B) Management is interested in the asset structure of the entity. C) Management is always interested in maximum profitability. D) Management is interested in the financial structure of the entity. Show Answer Correct Answer: C) Management is always interested in maximum profitability. 8. If revenue for 2021 is25, 000 and revenue for 2020 is 23, 000, the variance percentage is 7% A) True. B) False. Show Answer Correct Answer: A) True. 9. A business with operating expenses that exceed its benchmark should always begin by reducing the number of employees, the largest operating expense for most businesses. A) False. B) True. Show Answer Correct Answer: A) False. 10. Where the Trade Payables will be classified in the Balance Sheet? A) Current Liabilities. B) Term Liabilities. C) Net Worth. D) Non of the above. Show Answer Correct Answer: A) Current Liabilities. 11. In periods of inflation, accounting depreciation is ..... relative to replacement cost, and real economic income is ..... A) Understated; understated. B) Overstated; overstated. C) Correctly stated; correctly stated. D) Understated; overstated. E) Overstated; understated. Show Answer Correct Answer: D) Understated; overstated. 12. Operating margin is also referred to as A) Rate of return on sales. B) Earnings per share. C) Operating income. D) Gross margin. Show Answer Correct Answer: A) Rate of return on sales. 13. If Long Term Uses are more than the Long Term Sources, what will be resultant figure called? A) Long Term Surplus. B) Long Term Deficit. C) Working Capital Gap. D) Non of the above. Show Answer Correct Answer: B) Long Term Deficit. 14. Which of these is the largest planet in the Solar System? A) Pluto. B) Mars. C) Jupiter. D) Mercury. E) Earth. Show Answer Correct Answer: C) Jupiter. 15. In analyzing the financial statements of a client's business, you notice that the collection period for accounts receivable has been increasing. What does this increase suggest about the firm's credit policy? A) The firm is losing qualified customers. B) The credit policy is too lenient. C) The collection period has no relationship to a firm's credit policy. D) The firm's current ratio is also increasing. Show Answer Correct Answer: B) The credit policy is too lenient. 16. A unit is enjoying CC limit of Rs. 20 lakh and turnover for FY 2017-18 was 110 lakh. The unit has approached for enhancement of Rs. 10 lakh in CC limit with estimated turnover of Rs. 150 lakh for FY 2018-19. Whether the Audited Financial Statements are required? A) Yes, as the enhanced exposure will be more than Rs. 25 lakh. B) No, because the turnover is less than Rs. 200 lakh. C) Depends upon the relationship with the borrower. D) Not at all required. Show Answer Correct Answer: A) Yes, as the enhanced exposure will be more than Rs. 25 lakh. 17. Which is an example of tangible fixed Assets? A) Copyrights. B) Pre-paid expenses. C) Land & Building. D) Pre-operating expenses. Show Answer Correct Answer: C) Land & Building. 18. The ..... provides a financial summary of the firm's operating results during a specified period. A) Balance sheet. B) Statement of retained earnings. C) Statement of cash flows. D) Income statement. Show Answer Correct Answer: D) Income statement. 19. Which is not a component of an Audited Financial Report? A) Statement of Changes in Equity. B) Deed of General Meeting of Shareholders. C) Neraca. D) Income statement. Show Answer Correct Answer: B) Deed of General Meeting of Shareholders. 20. Which of the following parties would perform an internal financial analysis? A) A firm's competitors. B) A firm's creditors. C) A financial analyst forecasting the next period's borrowing needs. D) Analysts for investment companies. Show Answer Correct Answer: C) A financial analyst forecasting the next period's borrowing needs. 21. What does the current ratio measure? A) The firm's ability to meet its annual interest payments. B) The extent to which current liabilities are covered by current assets. C) The firm's ability to pay off short-term obligations without relying on the sale of inventories. D) The rate of return on common stockholders' investment. Show Answer Correct Answer: B) The extent to which current liabilities are covered by current assets. 22. Interest Coverage Ratio is to be calculated as? A) Cash Accruals / Interest. B) EBIDT / Interest. C) EBITDA / Interest. D) PAT / Interest. Show Answer Correct Answer: C) EBITDA / Interest. 23. Interest Coverage Ratio (ICR) is calculated by dividing EBIDTA from Interest expenses. What does 'A' represents in EBIDTA? A) Accruals. B) Actual income. C) Adjustments. D) Amortization. Show Answer Correct Answer: D) Amortization. 24. Who owns the retained earnings of a public firm? A) Inland Revenue Board Of Malaysia. B) Common stockholders. C) Bondholders. D) Preferred stockholders. Show Answer Correct Answer: B) Common stockholders. 25. Which analysis is considered as static A) Vertical analysis. B) External analysis. C) Internal analysis. D) Horizontal analysis. Show Answer Correct Answer: A) Vertical analysis. 26. The main source of revenue for a trading business A) Sales. B) Capital. C) Fees received. D) Dividends. Show Answer Correct Answer: A) Sales. 27. Profit on sale of investments is shown in which section of the Cash Flow Statement? A) Investing Activities. B) Non-Operating Activities. C) Financing Activities. D) Operating Activities. Show Answer Correct Answer: A) Investing Activities. 28. The ..... is useful in evaluating credit and collection policies. A) Average collection period. B) Average payment period. C) Current ratio. D) Current asset turnover. Show Answer Correct Answer: A) Average collection period. 29. A company's financial position would best be evaluated using the: A) Income statement. B) Balance sheet. C) Statement of cash flows. D) Auditor's report. Show Answer Correct Answer: B) Balance sheet. 30. Patents and trademarks are examples of A) Intangible assets under development. B) Tangible fixed assets. C) Capital work-in-capital. D) Intangible fixed assets. Show Answer Correct Answer: D) Intangible fixed assets. ← PreviousNext →Related QuizzesAccounting QuizzesFinance 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 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books