Practice Ratio Analysis - 3.4.4 | Chapter 3: Financial Statement Analysis – ICSE Class 12 | ICSE Class 12 Accounts
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Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What is the formula for calculating the Current Ratio?

💡 Hint: Think about a company's short-term assets versus its short-term debts.

Question 2

Easy

Define the term 'Net Profit Ratio'.

💡 Hint: Consider how profit relates to total sales made by the business.

Practice 4 more questions and get performance evaluation

Interactive Quizzes

Engage in quick quizzes to reinforce what you've learned and check your comprehension.

Question 1

What does the Current Ratio measure?

  • Long-term solvency
  • Short-term liquidity
  • Operational efficiency

💡 Hint: Think about how well a company can cover its immediate debts.

Question 2

True or False: A higher Debt-Equity Ratio indicates lower financial risk.

  • True
  • False

💡 Hint: Consider how debt affects a company's stability.

Solve 2 more questions and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A company has current assets of ₹1,000,000 and current liabilities of ₹500,000. Analyze the implications of its Current Ratio.

💡 Hint: Consider the importance of being above 1:1 for immediate financial stability.

Question 2

If a company's total debt is ₹1,000,000, total equity is ₹500,000, and it has a Net Profit of ₹200,000 with net sales of ₹1,000,000, calculate and interpret its Debt-Equity Ratio and Net Profit Ratio.

💡 Hint: Think about how leverage influences business risk.

Challenge and get performance evaluation