This quiz works best with JavaScript enabled. Home > Finance > Accounting > Financial Statement Analysis > Financial Statement Analysis – Quiz 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Statement Analysis Quiz 5 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The number of times during an operating period that the average inventory was sold. A) Inventory turnover. B) Working capital. C) Return on investment. D) Debt-to-assets ratio. Show Answer Correct Answer: A) Inventory turnover. 2. The debt ratio is an example of a A) Solvency ratio. B) Liquidity ratio. C) Profitability ratio. D) Market ratio. Show Answer Correct Answer: A) Solvency ratio. 3. What are the tools, techniques or methods for analysis and interpretation of financial statements? A) Ratio Analysis. B) Trend Analysis. C) Comparison with the previous year data. D) All of the above. Show Answer Correct Answer: D) All of the above. 4. The Raw Materials holding level is compared in terms of? A) Months' Cost of Production. B) Months' Cost of Sales. C) Months' Purchase. D) Months' Consumption. Show Answer Correct Answer: D) Months' Consumption. 5. Choose the appropriate ratio analysis:Debt to assets ratio A) Solvency Ratios. B) Liquidity ratios. C) Financial Ratios. D) Profitability ratios. Show Answer Correct Answer: A) Solvency Ratios. 6. What is the purpose of the Statement of Financial Position? A) Inform stakeholders the assets and liabilities of business. B) Provides information on how resources are obtained and used and the claim by the owner on the net assets of the business at a point in time. C) Provides information on how resources are obtained and used in the business at a point in time. D) Inform stakeholders the owner's equity of business. Show Answer Correct Answer: B) Provides information on how resources are obtained and used and the claim by the owner on the net assets of the business at a point in time. 7. Which suppliers of funds bear the greatest risk and should therefore earn the greatest return? A) Bondholders. B) Preferred shareholders. C) Common stockholders. D) General creditors such as banks. Show Answer Correct Answer: C) Common stockholders. 8. What is the formula for calculation of Current Ratio? A) Current Liabilities / Current Assets. B) Current Assets / Current Liabilities. C) Current Assets + Current Liabilities. D) Current Assets-Current Liabilities. Show Answer Correct Answer: B) Current Assets / Current Liabilities. 9. Indicates the number of dollars in sales the firm generates from each dollar it has invested in assets. A) Debt-to-equity ratio. B) Asset turnover ratio. C) Acid test/ quick ratio. D) Debt-to-assets ratio. Show Answer Correct Answer: B) Asset turnover ratio. 10. ..... provides a snapshot of the financial condition of the firm at a particular time. A) The balance sheet. B) The income statement. C) The statement of cash flows. D) All of the options are correct. E) None of the options are correct. Show Answer Correct Answer: A) The balance sheet. 11. The following are examples of real assets except: A) Patents. B) Common stock. C) Office buildings. D) Machinery. Show Answer Correct Answer: B) Common stock. 12. What is Multi-step income statement? A) A multi-step income statement provides a subtotal for gross pro. B) A multi-step income statement provides a revenue, profit. C) The multi-step income statement details the gains or losses of a business. D) A multi-step income statement, on the other hand, separates operational revenues and expenses from non-operational ones. Show Answer Correct Answer: A) A multi-step income statement provides a subtotal for gross pro. 13. Your firm has the following balance sheet statement items:Total current liabilities of RM805, 000; Total assets of RM2, 655, 000Fixed and other assets of RM1, 770, 000; and Long-term debt of RM200, 000. What is the amount of the firm's total current assets? A) RM325, 000. B) RM600, 000. C) RM885, 000. D) RM1, 550, 000. Show Answer Correct Answer: C) RM885, 000. 14. In order to increase ROIC, a business should ..... A) Find a business with large total addressable market. B) Use more debt financing as source of capital. C) Increase the life cycle of its product portfolio. D) Identify inefficiencies in the business process and cut cost. Show Answer Correct Answer: D) Identify inefficiencies in the business process and cut cost. 15. A more recent issue that is causing major problems in the business community is A) Ethical problems. B) Short-term versus long-term financial goals of. C) The privatization of ownership. D) Management. Show Answer Correct Answer: A) Ethical problems. 16. Creditors or suppliers are interested to know the A) Short-term solvency/liquidation of the concern. B) Profitability of the firm in relation to turnover. C) Profitability of the firm in relation to investors. D) Effective utilisation of its (firm's) resources. Show Answer Correct Answer: A) Short-term solvency/liquidation of the concern. 17. Reasons for reduction in Net Working Capital could be? A) Losses in business. B) Conversion of current assets into non-current assets. C) Use of short term funds for long term purposes. D) All of the above. Show Answer Correct Answer: D) All of the above. 18. While preparing Common Size Statement, each item of income statement is expressed as % of A) Profit before tax. B) Total Income. C) Revenue from operation. D) Other Income. Show Answer Correct Answer: C) Revenue from operation. 19. The corporate governance mechanism is a mechanism for monitoring and implementing all activities and policies within the company. Indonesia itself uses a two-tier corporate governance system which is characterized by A) There is a Board of Directors and a Board of Commissioners. B) There is a Board of Directors and an Audit Committee. C) The existence of an Independent Board of Commissioners. D) The existence of an Audit Committee. Show Answer Correct Answer: A) There is a Board of Directors and a Board of Commissioners. 20. Loan which is taken without any mortgage of asset is known as? A) Secured Loan. B) Unsecured Loan. Show Answer Correct Answer: B) Unsecured Loan. 21. Transfer to General Reserve will be recorded under ..... A) Non-Operating Expenses. B) Appropriations. C) Profit & Loss A/C b/d. D) None of above. Show Answer Correct Answer: B) Appropriations. 22. Non-current liabilities are business obligations that are due within one year of a company's normal operating cycle. A) True. B) False. Show Answer Correct Answer: B) False. 23. ..... is a report of the cash flow generated by the firm's operations, investments, and financial activities. A) The balance sheet. B) The income statement. C) The statement of cash flows. D) All of the options are correct. E) None of the options are correct. Show Answer Correct Answer: C) The statement of cash flows. 24. Adjusted Tangible Net Worth (TNW) represents the real / actual Promoters' Contribution. How Adjusted TNW is calculated? A) Net Worth-Revaluation Reserve-Intangibles-Investment in associates / subsidiaries / JVs etc. B) Net Worth-Non Current Assets. C) Net Worth-Investment in associates / subsidiaries / JVs etc. D) Net Worth-Intangibles. Show Answer Correct Answer: A) Net Worth-Revaluation Reserve-Intangibles-Investment in associates / subsidiaries / JVs etc. 25. Current assets include only those assets which are expected to be realized within ..... A) 6 months. B) 1 year. C) 3 months. D) 2 years. Show Answer Correct Answer: B) 1 year. 26. The following includes an audit opinion A) Unqualified Opinion. B) Legal Opinion. C) Testified Opinion. D) Second Opinion. Show Answer Correct Answer: A) Unqualified Opinion. 27. If net sales are P1, 500, 000 and accounts receivable amount to P300, 000, how long is the average collection period? A) NOT IN THE CHOICES. B) 64.00 days. C) 72.00 days. D) 36.00 days. E) 45.00 days. Show Answer Correct Answer: C) 72.00 days. 28. Explain the concept of the gross profit margin and its relevance in financial statement analysis. A) The gross profit margin is a measure of a company's total revenue. B) The gross profit margin is irrelevant in financial statement analysis. C) The gross profit margin only reflects a company's marketing strategy. D) The gross profit margin is a financial metric that measures a company's efficiency in generating profit from its revenue. It is relevant in financial statement analysis as it provides insight into a company's pricing strategy, production efficiency, and overall financial health. Show Answer Correct Answer: D) The gross profit margin is a financial metric that measures a company's efficiency in generating profit from its revenue. It is relevant in financial statement analysis as it provides insight into a company's pricing strategy, production efficiency, and overall financial health. 29. Annual report is issued by a company to its: A) Directors. B) Shareholders. C) Managers. D) Auditors. Show Answer Correct Answer: B) Shareholders. 30. A Company has changed the method of applying Depreciation from WDV to SLM. What will the impact on the profit for the particular year in which, change happened? A) No impact. B) Profit will increase for the particular year in which, change happened. C) Profit will either increase or decrease, depend upon the case to case basis. D) Profit will decrease for the particular year in which, change happened. Show Answer Correct Answer: B) Profit will increase for the particular year in which, change happened. ← PreviousNext →Related QuizzesAccounting QuizzesFinance QuizzesFinancial Statement Analysis Quiz 1Financial Statement Analysis Quiz 2Financial Statement Analysis Quiz 3Financial Statement Analysis Quiz 4Financial 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