Financial Performance Metrics Quiz

Challenge yourself with questions on current ratio, ROA, ROE, and more. Assess your understanding of financial performance metrics.

Practice Learn Test

What is the purpose of the current ratio?

To measure a company's liquidity

To measure a company's profitability

To measure a company's efficiency

To measure a company's solvency

What does the Return on Assets (ROA) ratio measure?

A company's ability to pay its short-term debts

A company's ability to generate profit from its assets

A company's ability to generate profit from its equity

A company's ability to generate profit from its sales

What is the meaning of EBITDA?

Earnings Before Interest, Taxes, Depreciation, and Amortization

Earnings Before Income Tax Deductions and Assets

Earnings Before Interest and Taxes, Depreciation, and Amortization

Earnings Before Interest, Taxation, Depreciation, and Assets

Which of the following is a measure of a company's efficiency in managing its inventory?

Quick Ratio

Inventory Turnover Ratio

Debt-to-Equity Ratio

Current Ratio

What does the Gross Profit Margin measure?

The efficiency of a company's production process

The profitability of a company's core business activities

The company's ability to generate profit from its equity

The company's ability to generate profit from its sales

Which financial metric measures a company's efficiency in using its assets to generate revenue?

Debt-to-Equity ratio

Operating Profit Margin

Asset Turnover Ratio

Price-to-Earnings ratio

What is the formula for the Debt-to-Equity ratio?

Total Liabilities / Total Assets

Total Liabilities / Equity

Total Assets / Equity

Total Debt / Total Equity

What does the Price-to-Earnings (P/E) ratio indicate?

The amount of earnings per share

The profitability of a company

The relationship between a company's stock price and its earnings

The company's ability to pay dividends

Which financial metric helps evaluate a company's ability to cover its interest payments with its operating profit?

Debt-to-Equity ratio

Times Interest Earned ratio

Return on Assets ratio

Operating Margin

#10

What is the formula for the Operating Profit Margin?

Net Income / Sales

Operating Income / Sales

Gross Profit / Sales

Net Income / Total Assets

#11

Which of the following is NOT a component of the DuPont Analysis?

Net Profit Margin

Asset Turnover

Financial Leverage

Operating Margin

#12

What does the Sustainable Growth Rate (SGR) measure?

The rate at which a company can grow its sales without additional capital

The rate at which a company can grow its profits sustainably

The rate at which a company can grow its dividend payments

The rate at which a company can grow its assets without additional financing

#13

What is the formula for the Return on Investment (ROI) ratio?

(Net Income - Dividends) / Total Assets

(Net Income + Interest Expense) / Total Assets

(Net Income + Interest Expense) / Shareholders' Equity

(Net Income - Dividends) / Shareholders' Equity

#14

What does the Inventory Turnover Ratio indicate?

The liquidity of a company's inventory

The efficiency of a company in managing its inventory

The profitability of a company's inventory

The relationship between inventory and accounts payable

#15

What does the term 'Free Cash Flow' represent in finance?

The cash a company generates from its operations after accounting for capital expenditures.

The cash a company has available for making dividend payments.

The cash a company has available for paying off its short-term debts.

The cash a company generates from its core business activities.