subject

Accounting Ratios

Commerce ⇒ Accountancy

Accounting Ratios starts at 12 and continues till grade 12. QuestionsToday has an evolving set of questions to continuously challenge students so that their knowledge grows in Accounting Ratios. How you perform is determined by your score and the time you take. When you play a quiz, your answers are evaluated in concept instead of actual words and definitions used.
See sample questions for grade 12
Define the Operating Ratio and state its formula.
Explain the difference between Gross Profit Ratio and Net Profit Ratio.
Explain the importance of the Current Ratio for creditors.
Explain the limitations of using accounting ratios for financial analysis.
A company has Cost of Goods Sold of ₹4,00,000 and Average Inventory of ₹80,000. What is its Inventory Turnover Ratio?
A company has EBIT of ₹2,00,000 and Interest Expense of ₹50,000. What is its Interest Coverage Ratio?
A company has Net Profit after Tax of ₹80,000, Interest of ₹20,000, and Capital Employed of ₹5,00,000. Calculate its ROI.
A company has Net Sales of ₹5,00,000 and Gross Profit of ₹1,00,000. What is its Gross Profit Ratio?
Which of the following is a solvency ratio? (1) Current Ratio (2) Quick Ratio (3) Debt-Equity Ratio (4) Operating Ratio
Which of the following is NOT a component of Current Liabilities? (1) Creditors (2) Bills Payable (3) Debentures (4) Outstanding Expenses
Which of the following is NOT a liquidity ratio? (1) Current Ratio (2) Quick Ratio (3) Debt-Equity Ratio (4) Cash Ratio
Which of the following is NOT a profitability ratio? (1) Net Profit Ratio (2) Return on Investment (3) Operating Ratio (4) Current Ratio
Fill in the blank: The _______ Ratio indicates the relationship between cost of goods sold and average stock held during the period.
Fill in the blank: The _______ Ratio is also known as the Acid-Test Ratio.
Fill in the blank: The _______ Ratio measures the ability of a company to pay interest on its debt.
Fill in the blank: The formula for Debtors Turnover Ratio is _______ / Average Debtors.
State whether the following statement is True or False: A low Proprietary Ratio indicates high dependence on outsiders' funds.
State whether the following statement is True or False: The Operating Ratio should be as high as possible.
State whether the following statement is True or False: The Quick Ratio excludes inventory from current assets.
True or False: A high Current Ratio always indicates good short-term financial health.