Multiple Choice Questions and Answers of Ratio Analysis

 Multiple Choice Questions and Answers of Ratio Analysis

Multiple Choice Questions and Answers of Ratio Analysis

1. Current Ratio is the relationship between

Answer-: current assets and current liabilities

2. Quick Ratio is the relationship between

Answer-: (current assets - stock) and (current liabilities – overdraft)

3. The current ratio of a firm is 2 : 1. The repayment of certain liabilities will

Answer-: improve current ratio

4. The current ratio of a firm is 3 : 1. The purchase of goods for cash will

Answer-: not change current ratio

5. The quick ratio of a firm is 2 : 1 The purchase of stock for cash will

Answer-: reduce quick ratio

6. The current ratio of a firm is 3 : 2. The repayment of long-term loan will

Answer-: reduce current ratio

7. Debt-equity ratio is the relationship between

Answer-: long-term debt and shareholder fund

8. The debt-equity ratio of a firm is 1 : 2. The repayment of long-term loan will

Answer-: improved debt-equity ratio

9. Stock turnover ratio is the relationship between

Answer-: cost of goods sold and average stock

10. Interest coverage ratio is the relationship between

Answer-: (earning before interest and tax) and interest charge