Practice Short Answer Questions - 1.8.2 | ICSE Class 12 Accounts – Chapter 5: Ratio Analysis | 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 current ratio formula?

💡 Hint: Think about measuring short-term financial health.

Question 2

Easy

State one example of a profitability ratio.

💡 Hint: Related to a company's sales and profits.

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 a high liquidity ratio indicate?

  • Higher debt
  • Better short-term financial health
  • Poor management

💡 Hint: Consider which option relates to financial obligations.

Question 2

Is the Quick Ratio the same as Current Ratio?

  • True
  • False

💡 Hint: Think about the differences in their calculations.

Solve and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A company has current assets of ₹2,00,000, inventory of ₹50,000, and current liabilities of ₹1,00,000. Calculate both the Current Ratio and Quick Ratio. Discuss the implications of your results.

💡 Hint: Use the formulas carefully to derive the two ratios.

Question 2

Assess a hypothetical company with a Debt-Equity Ratio of 2:1. If equity is ₹1,00,000, calculate the total debt. Interpret the financial risks involved with high leverage.

💡 Hint: Remember the relationship of debt to equity in the ratio.

Challenge and get performance evaluation