Accountancy M.C.Q (1 Marks)

An analysis in which the firm's ratio values are compared to those of a key competitor or group of competitors, primarily to identify areas for improvement is called.

1. Time - series analysis.
2. Benchmarking.
3. Combined analysis.
4. None of the above.

The _____________ ratios provide the information critical to the long-run operation of the firm.

1. Liquidity.
2. Activity.
3. Solvency.
4. Profitability.

Ratios provide a _____________ measure of a company's performance and condition.

1. Definitive.
2. Gross.
3. Relative.
4. Qualitative.

The ___________ ratios are primarily measures of return.

1. Liquidity.
2. Activity.
3. Debt.
4. Profitability.

______________ are especially interested in the average payment period, since it provides them with a sense of the bill paying patterns of the firm,

1. Customers.
2. Shareholders.
3. Lenders and suppliers.
4. Borrowers and buyers.

If the inventory turnover is divided into 365, it becomes a measure of

1. Revenue from operations efficiency.
2. The average age of the inventory.
3. Revenue from operations turnover.
4. The average collection period.

The ______________ is a measure of liquidity which excludes generally the least liquid asset.

1. Current ratio, accounts receivable.
2. Liquid ratio, accounts receivable.
3. Current ratio, inventory.
4. Liquid ratio, inventory.

ABC Co. extends credit terms of 45 days to its customers. Its credit collection would be considered poor if its average collection period was:

1. 30 days.
2. 36 days.
3. 40 days.
4. 57 days.

The ______________ of a business firm is measured by its ability to satisfy its short - term obligations as they become due.

1. Activity.
2. Liquidity.
3. Debt.
4. Profitability.

The two basic measures of liquidity are:

1. Inventory turnover and current ratio.
2. Current ratio and liquid ratio.
3. Gross profit margin and operating ratio.
4. Current ratio and average collection period.

Time - series analysis is often used to:

1. Assess developing trends.
2. Correct errors of judgement.
3. Reflect performance relative to some norms.
4. Standardize results.

The ___________ is useful in evaluating credit and collection policies.

1. Average payment period.
2. Current ratio.
3. Average collection period.
4. Inventory turnover ratio.

Networking capital is defined as:

1. Total assets less current assets.
2. The excess of current assets over current liabilities.
3. Current liabilities less current assets.
4. Marketable securities and cash.

The ______________ indicates the percentage of each sales rupee remaining after the firm has paid for its goods.

1. Net profit margin.
2. Operating profit margin.
3. Gross profit margin.
4. Earnings available to equity shareholders.

____________ analysis involves the comparison of different firms financial ratio at the same point of time.

1. Time - series.
2. Cross - sectional.
3. Marginal.
4. Quantitative.

______________ ratios are a measure of the speed with which various accounts are converted into sales or cash.

1. Activity.
2. Liquidity.
3. Debt.
4. Profitability.

___________ analysis involves comparison of current to past performance and the evaluation of developing trends.

1. Time - series.
2. Cross - sectional.
3. Marginal.
4. Quantitative.