Tools Of Financial Analysis Accounting Ratios CBSE Questions & Answers

Tools Of Financial Analysis Accounting Ratios

This is Accountancy Class 12 Tools of Financial Analysis Accounting Ratios CBSE Questions & Answers. There are 15 questions in this test with each question having around four answer choices.

Questions & Answers

1
Net Profit ratio is important because
  • A
    Both of these
    Correct
  • B
    None of these
  • C
    Measure profitability after consideration of all expenses
  • D
    Indicate overall operational efficiency
2
Return on investment ratio establishes the relationship of
  • A
    Profit (after interest and tax) with capital employed
  • B
    Profit (before interest and tax) with capital employed
    Correct
  • C
    Profit (after interest ) with capital employed
  • D
    Profit (before tax) with capital employed
3
The main purpose of Liquidity ratio is to measure the _______
  • A
    None of these
  • B
    Short term financial position
    Correct
  • C
    Medium term financial position
  • D
    Long term financial position
4
Following are the limitations of accounting ratio except ratio
  • A
    If different accounting policies are followed comparison is meaningless
  • B
    Ignores qualitative factor
  • C
    Useful for casting
    Correct
  • D
    No standard definition
5
Match the following. Option are as below
Question 5 figure 1
  • A
    a(i), b(ii), c(iii)
  • B
    a(iii), b(i), c(ii)
  • C
    a(ii), b(iii), c(i)
  • D
    a(i), b(iii), c(ii)
    Correct
6
XYZ Company's total current assets are Rs.10,000,000 and its total current liabilities are Rs.8,000,000 then its current ratio would be
  • A
    It is 2:1
  • B
    It is 1:2
  • C
    It is 1:25
    Correct
  • D
    It is 1:50
7
A company has a current ratio of 4:1 and Quick ratio is 2.5;1. Assuming that the inventories are Rs. 22500, find out total current assets and current liabilities
  • A
    Rs.50000, Rs.20000
  • B
    Rs.60000, Rs.15000
    Correct
  • C
    Rs.60000, Rs.10000
  • D
    Rs.40000, Rs.10000
8
From the following, calculate Inventories turnover ratio— Net Revenue from operations –` 2,00,000 Gross Profit = 25% , Opening Inventories = ` 5000 ,Inventories at the end -`
  • A
    5 times
  • B
    25 times
  • C
    10 times
  • D
    15 times
    Correct
9
Calculate Gross profit and sales— Average Inventories = ` 80,000 , Inventories turnover ratio = 6 times, Selling price = 25% above cost
  • A
    120000, 300000
  • B
    150000, 600000
  • C
    120000, 600000
    Correct
  • D
    120000, 500000
10
A Company made credit sales of Rs.7, 20,000 during the year. If the collection period is 50 days and the year is assumed to be of 360 days. Calculate Debtors Turnover ratio
  • A
    5.2 times
  • B
    7.4 times
  • C
    7.2 times
    Correct
  • D
    7.5 times
11
Calculate Operating ratio— Net Sales = Rs.5,40,000 ,Net Purchases Rs.3,10,000, Opening Stock Rs.75,000, Direct expenses Rs.32,000 ,Closing Stock Rs.50,000 ,Selling expenses Rs.25,000, Distribution expenses Rs. 15,000
  • A
    75.37 percent
    Correct
  • B
    70.37 percent
  • C
    72.37 percent
  • D
    65.37 percent
12
You have the following information about a company: quick ratio = 0.85, inventory = Rs.125,000 and current assets = Rs.375,000. What is the company’s current ratio?
  • A
    2.56
  • B
    0.85
  • C
    1.28
    Correct
  • D
    1.05
13
From the following information calculate Debt equity ratio
Question 13 figure 1
  • A
    It is 0.50:1
  • B
    It is 0.56:2
  • C
    It is 0.52:1
  • D
    It is 0.56:1
    Correct
14
From the following information Calculate Total Assets to Debt Ratio
Question 14 figure 1
  • A
    It is 3.6:1
  • B
    It is 2.6:1
    Correct
  • C
    It is 3.5:1
  • D
    It is 25:1
15
From the following information calculate Proprietary Ratio
Question 15 figure 1
  • A
    68 percent
    Correct
  • B
    56 percent
  • C
    65 percent
  • D
    60 percent