QUIZ (FINALS)

Question 1

Liquid Ratio is equal to Liquid Assets divided by _____

Answer 1

Current Liabilities

Question 2

What is the primary purpose of financial analysis?

Answer 2

To evaluate a company’s marketing strategies
To assess a company’s financial health and performance
To determine a company’s production efficiency
To analyze a company’s human resources management

Question 3

_______ ratios are a measure of the speed with which various accounts are covered into sales of cash

Answer 3

Activity

Question 4

_____ ratios are basically the measures of yield or return.

Answer 4

Profitability

Question 5

Transaction that will improve the Current Ratio

Answer 5

Payment to Trade Payables

Question 6

Ratio Analysis

Answer 6

Ratio analysis is useful in financial analysis.
Ratio analysis is helpful in communication and coordination.
Ratio Analysis is helpful in financial planning and forecasting.

Question 7

A statement that shows a company’s revenues and expenses over a specific period?

Answer 7

Income Statement

Question 8

The ______ of a business firm is measured by its ability to satisfy its short-term obligations as they become due.

Answer 8

Liquidity

Question 9

The current ratio can be numerically expressed in the form of:

Answer 9

Current Ratio = Current Assets / Current Liabilities

Question 10

Two basic measure of liquidity are _____ and _____

Answer 10

Current Ratio, Quick Ratio

Question 11

The _____ is useful in evaluating credit and collection policies.

Answer 11

Average Collection Period

Question 12

Working Capital is the _____

Answer 12

Difference between Current Assets and Current Liabilities

Question 13

Debt to equity ratio established the relationship between

Answer 13

Long-term debt (external equities) and equity (internal equities)