1)This ratio refers to the ability of a firm to meet its short-term obligations out of its short-term resources
(A)Liquidity ratio
(B)Leverage ratios
(C)Activity ratios
(D)Profitability ratios
2) The measure of how efficiently its assets resources are employed by a firm is called
A)Liquidity ratio
B)Leverage ratios
C)Activity ratios
3)A current ratio of what and above indicates the availability of sufficient net working capital and the ability of the firm to meet its current liabilities?
A)2:1
B)1.44:1
C)1.55:1
D)1.66:1
4)The following is also known as External Internal Equity ratio
A)Current ratio
B)Acid test ratio
C)Debt Equity ratio
D)Debt service coverage ratio
5)A higher inventory ratio indicates
A)Better inventory management
B)Quicker turnover
C)Both ‘A’ and ‘B’
D)None of the above
6)Return on Investment Ratio (ROI) =
A)(Gross profit / Net sales) x 100
B)(Gross profit x Sales / Fixed assets) x 100
C)(Net profit / Sales) x 100
D)(Net profit / Total assets) x 100
7)Liquid Ratios are also known as
(A) Current Ratio
(B) Acid-test ratio
(C) Cash ratio
(D) None of the above
8)Rule of thumb for acid-test ratio is
(A) 1:0
(B) 2:1
(C) 1:1
(D) 1:2 32
9)Gross capital employed is equal to Total
(A) Assets
(B) Capital
(C) Current Assets
(D) Liabilities
10)Two elements of a Current ratio are current assets and
(A) Liabilities
(B) Current Liabilities
(C) Total Liabilities
(D) Quick Liabilities
Answer key
1A
2C
3A
4C
5C
6D
7B
8C
9A
10B
