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CFA Level I > Vol. 3 LM2 Balance Sheet Ratios > Flashcards

Vol. 3 LM2 Balance Sheet Ratios Flashcards

1
Q

classification

current ratio

Balance Sheet

A

liquidity ratio

Balance Sheet

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2
Q

classification

quick ratio

Balance Sheet

A

liquidity ratio

Balance Sheet

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3
Q

Classification

cash ratio

Balance Sheet

A

liquidity ratio

Balance Sheet

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4
Q

Classification

Long-term debt-to-equity ratio

Balance Sheet

A

solvency ratio

Balance Sheet

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5
Q

classification

Debt-to-equity ratio

Balance Sheet

A

solvency ratio

Balance Sheet

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6
Q

classification

Total debt ratio

Balance Sheet

A

solvency ratio

Balance Sheet

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7
Q

classfication

Financial leverage ratio

Balance Sheet

A

solvency ratio

Balance Sheet

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8
Q

indication

current ratio

Balance Sheet

A

company’s ability to meet current liabilities

Balance Sheet

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9
Q

what is it used to measure

quick ratio

Balance Sheet

A

company’s ability to meet current liabilities

Balance Sheet

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10
Q

what is it used to measure

cash ratio

Balance Sheet

A

company’s ability to meet current liabilities

Balance Sheet

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11
Q

indication

Long-term debt-to-equity ratio

Balance Sheet

A

Financial risk and financial leverage

Balance Sheet

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12
Q

what is it used to measure

Debt-to-equity

Balance Sheet

A

Financial risk and financial leverage

Balance Sheet

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13
Q

what is it used to measure

Total debt ratio

Balance Sheet

A

Financial risk and financial leverage

Balance Sheet

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14
Q

indication

Financial leverage

Balance Sheet

A

Financial risk and financial leverage

Balance Sheet

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15
Q

calucation

Current ratio

Balance Sheet

A

Current assets / Current liabilities

Balance Sheet

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16
Q

calculation

Quick ratio

Balance Sheet

A

(Cash + Marketable securities + Receivables) / Current liabilties

Balance Sheet

17
Q

calculation

Cash ratio

Balance Sheet

A

(Cash + Marketable securities) / Current liabilities

Balance Sheet

18
Q

calculation

Long-term debt-to-equity ratio

Balance Sheeet

A

Total long-term debt / Total equity

Balance Sheet

19
Q

calculation

Total debt ratio

Balance Sheet

A

Total debt / Total assets

Balance Sheet

20
Q

calculation

Financial leverage

Balance Sheet

A

Total assets / Total equity

Balance Sheet

21
Q

Fill in the blank

___ refers to a company’s ability to meet its short-term financial commitments.

Balance Sheet

A

Liquidity

Balance Sheet

22
Q

Fill in the blank

____ refers to a company’s ability to meet its financial obligations over the longer term.

Balance Sheet

A

Solvency

Balance Sheet

23
Q

An investor worried about a company’s short-term solvency would use

A. current ratio
B. return on equity
C. financial leverage ratio

Balance Sheet

A

A. current ratio
Current ratio is liquidity ratio, which is revelant to short-term liabilities.

Balance Sheet

24
Q

The most stringent test of a company’s liquidity

A. cash ratio
B. quick ratio
C. current ratio

Balance Sheet

A

A. cash ratio
because it sticks strictly to cash or cash-equivalent holdings

Balance Sheet

25
Q

An investor worried about a company’s long-term solvency would use

A. current ratio
B. return on equity
C. debt-to-equity ratio

Balance Sheet

A

C. debt-to-equity ratio

Balance Sheet

CFA Level I (64 decks)

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