Practice - Types of Financial Ratios
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Practice Questions
Test your understanding with targeted questions
What is the formula for the Current Ratio?
💡 Hint: Think about a company's ability to meet short-term obligations.
What does a Quick Ratio of 1:1 indicate?
💡 Hint: Consider inventory's role in liquidity.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What type of ratio measures a firm's ability to meet short-term debts?
💡 Hint: Think about the immediate financial obligations.
True or False: A Debt-to-Equity Ratio higher than 1 indicates more equity financing.
💡 Hint: Reflect on the balance between debt and equity financing.
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Challenge Problems
Push your limits with advanced challenges
A tech company has total assets of $1,000,000, total liabilities of $600,000, and net profit of $150,000. Calculate the Debt-to-Equity Ratio and the Return on Equity (ROE).
💡 Hint: Understand the relationship between debts and equity in a company's financial structure.
Consider a retail business with a Quick Ratio of 0.5. What does this indicate about its liquidity, and what actions could be taken to improve this ratio?
💡 Hint: Think about how inventory affects liquidity ratios.
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