CBSE Class 12 Accountancy Ratio Analysis Worksheet Set 03

Question. Management are interested in
(a) Activity Ratios
(b) Activity Ratios and Profitability Ratios
(c) Profitability Ratios
(d) None of the options

Answer: B

Question. The excess of Current ratio is also treated as a sign of managerial
(a) Inefficiency
(b) Efficiency
(c) Inefficiency and Efficiency
(d) None of the options

Answer: A

Question. Which ratio is considered as safe margin of solvency?
(a) Liquid ratio
(b) Current ratio
(c) None of the options
(d) Current ratio

Answer: D

Question. Inventory ratio is a relationship between
(a) Cost of good sold and cost of average inventory
(b) Cost of good Purchased and cost of average inventory
(c) Cost of good sold and cost of average inventory and Cost of good Purchased and cost of average inventory
(d) None of the options

Answer: A

Question. Current Ratio is 3:4, Current Liabilities Rs. 24000, the amount of current assets will be
(a) Rs 18000
(b) Rs 15000
(c) Rs 16000
(d) Rs 20000

Answer: A

Question. Capital Employed is equal to
(a) Total Assets-Total Liabilities
(b) Total Assets
(c) Fixed Capital+Working Capital
(d) Total Liabilities

Answer: C

Question. A low Stock turnover indicates
(a) Over investment in stock
(b) Monopoly situation
(c) Solvency Position
(d) None of the options

Answer: A

Question. Which ratio indicates the long-term or future solvency position of the business
(a) Net Profit Ratio
(b) Equity ratio
(c) Gross Profit Ratio
(d) None of the options

Answer: B

Question. When ratios are calculated on the basis of accounting information, they are called
(a) Accounting ratios
(b) Working Capital Ratio
(c) Profit ratio
(d) None of the options

Answer: A

Question. Patents and Copyrights fall under the category of:
(a) Current Assets
(b) Liquid Assets
(c) Intangible Assets
(d) None of Above

Answer: C

Question. Which ratio is not a part of Solvency Ratio?
(a) Debt to Equity Ratio
(b) Current Ratio
(c) otal Assets to Debt Ratio
(d) Proprietary Ratio

Answer: B

Question. Limitations of Ratio Analysis
(a) Accounting ratios ignore qualitative factors
(b) Absence of universally accepted terminology
(c) Ratios are affected by window-dressing
(d) All of the options

Answer: D

Question. Proprietary or equity ratio is equal to
(a) Shareholders funds/ total assets
(b) Shareholders funds+ total assets
(c) Shareholders funds- total assets
(d) None of the options

Answer: A

Question. Long term solvency is indicated by :
(a) Current Ratio
(b) Quick Ratio
(c) Net Profit Ratio
(d) Debt/Equity Ratio

Answer: D

Question. The solvency position of any firm is determined and measured with the help of
(a) Solvency ratios
(b) Activity Ratios
(c) Profitability Ratios
(d) None of the options

Answer: A

Question. Financial ratio analysis are conducted by which groups of analysts
(a) Managers
(b) Equity investors
(c) Long term creditors
(d) All of the options

Answer: D

Question. Collection of debtors
(a) Increases current ratio
(b) Has no effect on current ratio
(c) Decreases current ratio
(d) None of the options

Answer: C

Question. A Company’s liquid assets are Rs. 10,00,000 and its current liabilities are Rs.8,00,000. Subsequently, it purchased goods for Rs. 1,00,000 on credit. Quick ratio will be......
(a) 1.11:1
(b) 1.22:1
(c) 1.38 : 1
(d) 1.25 : 1

Answer: A

Question. The_____ratio may indicate the firm is experiencing stock outs and lost sales.
(a) Inventory turnover
(b) Average collection period
(c) Quick
(d) None of the options

Answer: C

Question. Low Current Ratio indicates
(a) Business cannot meet short term liability
(b) Business can meet long term liability
(c) Business cannot meet long term liability
(d) Business can meet short term liability

Answer: A

Question. Ratio of Net Sales to Net Working Capital is
(a) Profitability Ratio
(b) Liquidity Ratio
(c) None of the options
(d) Working Capital Turnover Ratio

Answer: D

Question. Which Items Included in Current Assets for get the current ratio
(a) All of the options
(b) Current investments
(c) Current Stock
(d) Trade receivables (bills receivable and sundry debtors less provision for doubtful debts)

Answer: A

Question. Credit Purchases Rs.9,60,000; Cash Purchases Rs.6,40,000; Creditors Rs.2,40,000; Bills Payable Rs.80,000. Average Payment Period will be :
(a) 3 months
(b) 4 months
(c) 2.4 months
(d) 6 months

Answer: B

Question. Working Capital is equal to
(a) Current Assets Current Liabilities
(b) Current Assets + Current Liabilities
(c) Current Assets/Current Liabilities
(d) None of the options

Answer: A

Question. Traditional Classification is further divided into the categories
(a) All of the options
(b) Income Statement Ratios
(c) Balance Sheet Ratios
(d) Composite Ratios

Answer: A

Question. Liquid Assets :
(a) Current Assets - Prepaid Exp.
(b) Current Assets - Inventory + Prepaid Exp.
(c) Current Assets - Inventory - Prepaid Exp.
(d) Current Assets + Inventory - Prepaid Exp.

Answer: C

Question. Current Assets Rs.5,00,000; Current Liabilities Rs. 1,00,000; Revenue from Operations Rs.28,00,000. Working Capital turnover Ratio will be:
(a) 7 times
(b) 5.6 times
(c) 8 times
(d) 10 times

Answer: A

Question. The ___________ ratios are primarily measures of return.
(a) Liquidity
(b) Profitability
(c) Activity
(d) Debt

Answer: C