Practice Types of Financial Ratios - 19.2 | 19. Financial Statement Analysis – Ratio Analysis | Management 1 (Organizational Behaviour/Finance & Accounting)
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Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What is the formula for the Current Ratio?

💡 Hint: Think about a company's ability to meet short-term obligations.

Question 2

Easy

What does a Quick Ratio of 1:1 indicate?

💡 Hint: Consider inventory's role in liquidity.

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 type of ratio measures a firm's ability to meet short-term debts?

  • Liquidity Ratios
  • Profitability Ratios
  • Solvency Ratios

💡 Hint: Think about the immediate financial obligations.

Question 2

True or False: A Debt-to-Equity Ratio higher than 1 indicates more equity financing.

  • True
  • False

💡 Hint: Reflect on the balance between debt and equity financing.

Solve and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

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.

Question 2

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.

Challenge and get performance evaluation