Cash from operating activities will decrease due to :
1.Increase in Current Assets
2. Decrease in Current Liabilities
3.Neither of the two
4.Both (a) and (b)
Cash sales in :
1.Operating Activity
2.Investing Activity
3. Financing Activity
4.None of these
Cost of goods sold :
1.Sales – Net profit
2.Sales – Gross profit
3.Purchases – Opening Stock
4. None of the above
Current Ratio =
1.Current Assets/Current Liabilities
2.Liquid Assets/Current Liabilities
3.Liquid Assets/Current Assets
4.Fixed Assets/Current Assets
Current Ratio includes:
1. Stock
2. Debtors
3.Cash
4. All of these
Debt-equity ratio is :
1. Liquidity Ratio
2. Activity Ratio
3.Solvency Ratio
4. Operating Ratio
Equity share capital ₹ 15,00,000 Reserve and Surplus ₹ 7,50,000 Total Assets ₹ 45,00,000 Properletory Ratio ?
1.50%
2. 33.3%
3.200%
4. 60%
If net profit is 7 50,000 after writing off goodwill 7 10,000 then the cash flow from operating activities will be:
1.₹ 60,000
2. ₹ 40,000
3. ₹ 50,000
4. ₹ 30,000
If net profit is ₹ 35,000 after writing off good will ₹ 6,000 and loss on sale of furniture ₹ 1,000, cash flow from operating activities will be :
1.₹ 35,000
2.₹ 42,000
3.₹ 29,000
4.₹ 28,000
Issue of shares in consideration of purchase of plant and machinery results into :
1.Inflow of Cash
2.Outflow of Cash
3.Neither Inflow nor Outflow
4. None of these
Liquid Assets include :
1.Bills Receivable
2. Debtors
3.Cash Balance
4.All of these
Liquid Ratio is also known as:
1.Current Ratio
2.Quick Ratio
3. Capital Ratio
4. None of these
Operating Ratio is:
1. Profitability Ratio
2. Activity Ratio
3. Solvency Ratio
4.None of these
Preparation of cash flow statement is :
1.Mendatory
2.Recommendatory
3.Required under the Companies Act
4. None of these
Profitability Ratio is generally shown in :
1.Simple Ratio
2. Percentage
3.Times
4. None of these
Profitability Ratios are generally expressed in :
1. Simple Ratio
2.Percentage
3.Times
4.None of these
Proprietory Ratio indicates the relationship between proprietor’s funds and….
1.Reserve
2.Share Capital
3. Total Assets
4.Debentures
Ratio based on figures of profit & loss as well a the Balance sheet are:
1.Profitability Ratios
2.Operation Ratio
3.Liquidity Ratio
4.Composite Ratio
Stock turnover ratio comes under :
1.Liquidity Ratio
2. Profitability Ratio
3.Activity Ratio
4.None of these
The following groups of ratios primarily measure risk
1. Liquidity, activity and profitability
2. Liquidity, activity and common stock
3. Liquidity, activity and debt
4. Activity, debt and profitability
The formula for finding out Debt-Equity Ratio is:
1. Long-term Debts/Shareholders’ Funds
2.Debentures/Equity Capital
3.Net Profit/Total Capital
4. None of these
The gross profit ratio is the ratio of gross profit to :
1.Net Cash Sales
2. Net Credit Sales
3.Closing Stock
4. Net Total Sales
The ideal current ratio is :
1.2 : 1
2. 1 : 2
3.3 : 2
4. 3 : 4
The ideal liquid ratio is :
1. 2 : 1
2.1 : 1
3.5 : 1
4.4 : 1
The ratios are primarily measures of earning capacity of the business.
1. Liquidity
2. Activity
3.Debt
4. Profitability
The satisfactory ratio between internal and external equity is. :
1. 1 : 2
2.2 : 1
3. 3 : 1
4.4 : 1
The term ‘Current Liabilities’ does not include: .
1.Sundry Creditors
2. Debentures
3.Bills Payable
4.Outstanding Expenses
The term fixed assets include :
1.Cash
2.Machinery
3.Debtors
4. Prepaid Expenses
The term‘Current Assets’include
1.Long-term Investment
2.Short-term Investment
3.Furniture
4.Preliminary Expenses
The two basic measures of liquidity are :
1.Inventory Turnover and Current Ratio
2. Current Ratio and Liquid Ratio
3.Current Ratio and Average Collection Period
4.Current Ratio and Debtors Turnover Ratio
To know the return on investment, by capital employed we mean:
1.Net Fixed Assets
2.Current Asset-Current Liabilities
3.Gross Block
4. Fixed Assets + Current Assets-Current Liabilities
To test the liquidity of a concern which of the following ratios is useful ?
1.Capital Turnover Ratio
2.Acid Test Ratio
3.Stock Turnover Ratio
4. Net Profit Ratio
Total Assets ₹ 7,70,000 Total Liabilities ₹ 2,60,000 Current Liabilities ₹ 40,000 Total Assets to Debt Ratio is:
1. 3.5 : 1
2. 2.56 : 1
3. 2.8 : 1
4.3 : 1
Total Assets ₹ 8,10,000 Total Liabilities ₹ 2,60,000 Current Liabilities ₹ 40,000 Debt-equity ratio is:
1. 0.05 : 1
2. 0.4 : 1
3.2.5 : 1
4. 4 : 1
What does Creditors Turnover Ratio take into account:
1. Total credit purchases
2. Total credit sales
3. Total cash sales
4.Total cash purchases
When Cash is 7 10,000 Stock is 7 25,000, B/R is 7 5,000 Creditors is 7 22,000 and Bank Overdraft is 7 8,000 then current ratio is :
1. 2 : 1
2. 4 : 3
3.3 : 4
4. 1 : 2
When Financial Statements of two or more organisations are analysed, it is called :
1. Intra-firm Analysis
2.Inter-firm Analysis
3.Vertical Analysis
4.None of these
When opening stock is ₹ 50,000 closing stock ₹ 60,000 and cost of goods sold is ₹ 2,20,000, then stock turn over ratio is:
1.2 times
2.3 times
3.4 times
4. 5 times
Which of the following assets is not taken into consideration in calculating acid-test ratio ?
1.Cash
2.Bills Receivable
3.Stock
4. None of these
Which of the following is a type of Financial Analysis on the basis of material used ?
1.Internal Analysis
2.External Analysis
3.Internal Audit
4. Both (a) and (b)
Which of the following is an example of Cash Flow from Operating Activities ?
1.Purchase of Machinery
2.Issue of Shares
3. Purchases of Inventory for Cash
4. Purchases of Investment
Which of the following is an operating’ income ?
1.Sale of Merchandise
2.Interest Income
3.Dividend Income
4. Profit on the sale of old car
Which Of the following is limitation of financial analysis ?
1.Window-dressing
2. Basis of Valuation
3. Lack of Accuracy
4. All the above
Which of the following is not the limitations of financial analysis ?
1.Lack of Accuracy
2.Based on Historical facts
3. Basis of Valuation
4.Information of Profit and Loss
Which of the following non-operating expense?
1.Rent
2. Selling Expenses
3.Wages
4.Loss on Sale of Machinery
Which of the following statement correct ?
1. Retained Earnings = Total Income
2. Retained Earnings = Revenue-expenses
3.Retained Earnings = Gross Profit
4. None of the above
Which of the following transactions will improve the current ratio ?
1.Purchase of good for cash
2. Cash received from customers
3.Payment of creditors
4. Credit purchase of goods
Which one of the following ratios is most important in determining the long-term solvency of a company ?
1.Profitability Ratio
2.Debt-Equity Ratio
3.Stock Turnover Ratio
4.Current Ratio
While calculating cash flow from operating activities, which will be added ?
1. Increase in Stock
2. Increase in Creditors
3.Decrease in Bills Payable
4.Increase in Debtors
While calculating cash flow from operating netivities which will be deducted ?
1.Increase in Creditors
2. Increase in Debtors
3.Decrease in Debtors
4.Decrease in Prepaid Expenses