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1. Accounting ratio is a mathematical expression of relationship between two items or group of items in the financial statements.

 
 

2. Price level changes are ignored in ratio analysis. It is an advantage of ratio analysis.

 
 

3. quick ratio establishes the relationship between current  assets and current liabilities.

 
 

4. In calculating debt equity ratio all external debts are considered.

 
 

5. Debit balance in surplus balance in statements of profit and loss is not deducted to calculate shareholders funds to calculate debt equity ratio.

 
 

6. The objective of calculating proprietary ratio is to measure proportion of fixed assets financed by the shareholders funds.

 
 

7. In debt to total assets ratio debt includes only long term borrowing and long term provisions.

 
 

8. Interest coverage ratio shows the amount of profit available to cover the interest.

 
 

9. The formula for trade parables turnover ratio is net credit purchases/Average trade receivables.

 
 

10. Loose tools and stores and spares are excluded to calculate working capital to calculate working capital turnover ratio.

 
 

11. Gross profit helps in fixing selling prices and assessing efficiency of trading activities.

 
 

12. Young India Ltd. has a operating profit ratio of 20%. To maintain this ratio at 25% management may;

 
 
 
 

13. A transaction involving a decrease in debt equity ratio and increase in current ratio is ;

 
 
 
 

14. Current ratio is 2 : 3. On the sale of fixed asset [ book value Rs 20,000] for Rs 18000, state whatever the current ratio will ;

 
 
 
 

15. If opening inventory is Rs 1,20,000, cost of revenue from operations is Rs 10,00,000 and inventory turnover ratio is 5 times then closing inventory will be ;

 
 
 
 

16. A transaction involving a decrease in both current ratio and quick ratio is ;

 
 
 
 

17. If current ratio of a firm is 2.5 and its current liabilities are Rs 2,00,000. Its working capital will be ;

 
 
 
 

18. Non current assets of a firm are Rs 26,00,000, current assets are Rs 9,00,000 and shareholders funds are Rs 21,50,000. Total debts of the firm will be

 
 
 
 

19. Sincere Ltd. has a proprietary ratio of 25%. Maintain this ratio at 30% managements may ;

 
 
 
 

20. Working capital is Rs 7,20,000, trade parables Rs 40,000; other current liabilities Rs 2,00,000; calculate current rario.

 
 
 
 

21. Currents assets are Rs 4,00,00; inventories Rs 2,00,000; working capital Rs 2,40,000, calculate current ratio.

 
 
 
 

22. Which ratio is not a part of solvency ratio?

 
 
 
 

23. If total assets are Rs 1,25,000, total debt, i.e, external debts are Rs 1,00,000 and current liabilities are Rs 50,000, debt equity ratio will be ;

 
 
 
 

24. From the following which ratio is not a part of activity ratio ;

 
 
 
 

25. If revenue from operation is Rs 1,60,000 and gross profit is Rs 40,000, gross profit ratio will be ;

 
 
 
 

26. If revenue from operation is Rs 1,60,000 and gross profit is Rs 40,000, gross profit ratio will be ;

 
 
 
 

27. If revenue from operation is Rs 1,60,000 and gross profit is Rs 40,000, gross profit ratio will be ;

 
 
 
 

28. Revenue from operations Rs 9,00,000, gross profit 25% on cost, operating expenses Rs 90,000, operating ratio will be ;

 
 
 
 

29. Calculating operating profit ratio if revenue from operations is Rs 5,00,000, operating profit is Rs 75,000.

 
 
 
 

30. From the following which ratio is not a part of profitability ratio ;

 
 
 
 

31. From the following information, calculate proprietary ratio ; share capital Rs 5,00,000, non current assets Rs 22,00,000, reserves and surplus Rs 3,00,00, current assets Rs 10,00,000.

 
 
 
 

Question 1 of 31