FAR — Financial Accounting & Reporting — Quiz 75

Questions in this quiz (20)

1. Which ratio measures the portion of a company's assets financed through liabilities?

   • Profit margin ratio
   • Debt ratio
   • Current ratio
   • Asset turnover ratio

2. Which ratio measures the portion of a company's assets financed through liabilities?

   • Profit margin ratio
   • Debt ratio
   • Current ratio
   • Asset turnover ratio

3. Which formula calculates the debt ratio?

   • Total Liabilities ÷ Total Assets
   • Total Assets ÷ Total Liabilities
   • Net Income ÷ Sales
   • Current Assets ÷ Current Liabilities

4. Which formula calculates the debt ratio?

   • Total Liabilities ÷ Total Assets
   • Total Assets ÷ Total Liabilities
   • Net Income ÷ Sales
   • Current Assets ÷ Current Liabilities

5. Which ratio measures how effectively a company uses assets to generate sales?

   • Asset turnover ratio
   • Current ratio
   • Debt ratio
   • Profit margin ratio

6. Which ratio measures how effectively a company uses assets to generate sales?

   • Asset turnover ratio
   • Current ratio
   • Debt ratio
   • Profit margin ratio

7. Which formula calculates asset turnover?

   • Net Sales ÷ Average Total Assets
   • Net Income ÷ Revenue
   • Current Assets ÷ Current Liabilities
   • Revenue ÷ Liabilities

8. Which formula calculates asset turnover?

   • Net Sales ÷ Average Total Assets
   • Net Income ÷ Revenue
   • Current Assets ÷ Current Liabilities
   • Revenue ÷ Liabilities

9. Which ratio measures profitability relative to revenue?

   • Profit margin ratio
   • Debt ratio
   • Current ratio
   • Inventory turnover ratio

10. Which ratio measures profitability relative to revenue?

    • Profit margin ratio
    • Debt ratio
    • Current ratio
    • Inventory turnover ratio

11. Which formula calculates profit margin?

    • Net Income ÷ Net Sales
    • Net Sales ÷ Assets
    • Assets ÷ Liabilities
    • Revenue ÷ Expenses

12. Which formula calculates profit margin?

    • Net Income ÷ Net Sales
    • Net Sales ÷ Assets
    • Assets ÷ Liabilities
    • Revenue ÷ Expenses

13. Which ratio measures how quickly inventory is sold?

    • Inventory turnover ratio
    • Profit margin ratio
    • Current ratio
    • Debt ratio

14. Which ratio measures how quickly inventory is sold?

    • Inventory turnover ratio
    • Profit margin ratio
    • Current ratio
    • Debt ratio

15. Which formula calculates inventory turnover?

    • Cost of Goods Sold ÷ Average Inventory
    • Net Income ÷ Sales
    • Sales ÷ Assets
    • Revenue ÷ Liabilities

16. Which formula calculates inventory turnover?

    • Cost of Goods Sold ÷ Average Inventory
    • Net Income ÷ Sales
    • Sales ÷ Assets
    • Revenue ÷ Liabilities

17. Which ratio measures profitability relative to shareholders' equity?

    • Return on equity
    • Debt ratio
    • Current ratio
    • Asset turnover ratio

18. Which ratio measures profitability relative to shareholders' equity?

    • Return on equity
    • Debt ratio
    • Current ratio
    • Asset turnover ratio

19. Which formula calculates return on equity?

    • Net Income ÷ Average Stockholders' Equity
    • Net Sales ÷ Assets
    • Assets ÷ Liabilities
    • Revenue ÷ Expenses

20. Which formula calculates return on equity?

    • Net Income ÷ Average Stockholders' Equity
    • Net Sales ÷ Assets
    • Assets ÷ Liabilities
    • Revenue ÷ Expenses