Financial Analysis Ratios Quiz
Test your knowledge on financial ratios with this quiz covering current ratio, ROE, P/E ratio, inventory turnover, and more.
#1
What is the current ratio used for in financial analysis?
To measure a company's ability to pay its short-term liabilities with its short-term assets
To measure a company's profitability
To measure a company's efficiency in using its assets
To measure a company's long-term solvency
#2
Which ratio measures a company's ability to cover its interest expenses with its operating income?
Current ratio
Debt to equity ratio
Interest coverage ratio
Gross margin ratio
#3
What does the return on equity (ROE) ratio indicate?
Profitability of a company relative to its total equity
Profitability of a company relative to its total assets
Efficiency of a company in using its assets to generate income
Leverage of a company
#4
Which ratio is used to measure the efficiency of a company's inventory management?
Accounts receivable turnover ratio
Inventory turnover ratio
Days sales outstanding (DSO) ratio
Fixed asset turnover ratio
#5
Which financial ratio measures a company's ability to generate profit from its revenue?
Gross margin ratio
Return on assets (ROA) ratio
Return on equity (ROE) ratio
Net profit margin ratio
#6
What does the debt-to-equity (D/E) ratio indicate?
The proportion of debt and equity in a company's capital structure
The profitability of a company
The efficiency of a company in using its assets
The liquidity of a company
#7
What does the quick ratio measure?
A company's ability to meet its short-term liabilities with its most liquid assets
A company's ability to pay its current liabilities with its current assets
A company's profitability
A company's efficiency in using its assets
#8
What does the price-to-earnings (P/E) ratio indicate?
The market value of a company relative to its earnings
The liquidity of a company
The efficiency of a company in using its assets
The profitability of a company
#9
Which ratio measures the proportion of a company's operating income to its revenue?
Operating profit margin ratio
Gross margin ratio
Net profit margin ratio
Interest coverage ratio
#10
Which ratio is used to measure a company's ability to cover its short-term liabilities with its most liquid assets?
Current ratio
Quick ratio
Debt to equity ratio
Return on equity (ROE) ratio
#11
What does the gross margin ratio measure?
A company's ability to generate profit from its revenue
A company's ability to meet its short-term liabilities with its most liquid assets
A company's profitability relative to its total assets
A company's efficiency in using its assets to generate sales
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