Financial Statement Analysis Methods
This quiz can help assess your knowledge of financial statement analysis methods. To pass this quiz you will need to understand vertical analysis, horizontal analysis, trend analysis and ratio analysis.
Given inventory of £24,000, other current assets of £12,000 and current liabilities of £20,000, the acid test (quick ratio) will be:
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The PE ratio is calculated as follows:
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Which group of ratios measure how effectively the firm is using its assets?
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Which group of ratios shows the extent to which the firm is financed with debt?
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Felton Farm Supplies, Inc., has an 8 percent return on total assets of $300,000 and a net profit margin of 5 percent. What are its sales?
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Which group of ratios relate the financial charges of a firm to its ability to service them?
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Which of the following statements (in general) is correct?
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A debtor collection ratio of 12:1 means that:
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The gross profit margin is unchanged, but the net profit margin declined over the same period. This could have happened if __________.
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Which group of ratios measure a firm's ability to meet short-term obligations?
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In conducting a common-size analysis every balance sheet item is divided by __________ and every income statement is divided by __________.
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Return on capital employed for a company will increase if:
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Which group of ratios relate profits to sales and investment?
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If a company revalues its non-current assets upwards from historical cost, then its sales to capital employed ratio will:
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In conducting a common-size analysis every balance sheet item is divided by __________ and every income statement is divided by __________.
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