FAR — Financial Accounting & Reporting — Quiz 77

Questions in this quiz (20)

1. Which ratio measures the percentage of assets financed by liabilities?

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

2. Which ratio measures the percentage of assets financed by liabilities?

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

3. Which ratio evaluates how effectively a company uses its assets to produce revenue?

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

4. Which ratio evaluates how effectively a company uses its assets to produce revenue?

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

5. Which ratio measures the percentage of profit generated from sales?

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

6. Which ratio measures the percentage of profit generated from sales?

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

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

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

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

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

9. Which formula calculates the current ratio?

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

10. Which formula calculates the current ratio?

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

11. Which formula calculates the quick ratio?

    • (Cash + Accounts Receivable + Short-Term Investments) ÷ Current Liabilities
    • Current Assets ÷ Current Liabilities
    • Net Income ÷ Sales
    • Revenue ÷ Assets

12. Which formula calculates the quick ratio?

    • (Cash + Accounts Receivable + Short-Term Investments) ÷ Current Liabilities
    • Current Assets ÷ Current Liabilities
    • Net Income ÷ Sales
    • Revenue ÷ Assets

13. Which formula calculates the debt ratio?

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

14. Which formula calculates the debt ratio?

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

15. Which formula calculates asset turnover?

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

16. Which formula calculates asset turnover?

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

17. Which formula calculates inventory turnover?

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

18. Which formula calculates inventory turnover?

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

19. Which ratio measures net income relative to revenue?

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

20. Which ratio measures net income relative to revenue?

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