Financial Ratio Analysis and Performance Metrics Quiz
Take this quiz on ratio analysis to assess your understanding of key financial metrics. Test yourself now!
#1
What does the current ratio measure?
A company's ability to pay short-term liabilities with short-term assets
A company's profitability
A company's ability to pay long-term liabilities
A company's efficiency in managing inventory
#2
Which of the following is NOT a profitability ratio?
Return on Assets (ROA)
Gross Profit Margin
Debt-to-Equity Ratio
Net Profit Margin
#3
What does the return on assets (ROA) ratio measure?
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
A company's ability to generate profit from its liabilities
#4
What does the inventory turnover ratio measure?
A company's ability to generate profit from its inventory
A company's ability to generate sales from its inventory
A company's ability to finance its inventory
A company's ability to manage its inventory
#5
Which of the following is a solvency ratio?
Return on Assets (ROA)
Current Ratio
Gross Profit Margin
Earnings per Share (EPS)
#6
What does the debt-to-equity ratio indicate?
The proportion of debt financing a company uses relative to its equity financing
The level of profit generated from shareholder's equity
The level of liquidity a company possesses
The rate at which a company can turn assets into cash
#7
Which of the following is a liquidity ratio?
Earnings per Share (EPS)
Inventory Turnover Ratio
Quick Ratio
Price-to-Earnings (P/E) Ratio
#8
What does the asset turnover ratio measure?
A company's ability to generate sales from its assets
The efficiency of a company in managing its inventory
The proportion of a company's assets financed by debt
The profitability of a company relative to its assets
#9
Which of the following ratios helps in evaluating a company's ability to meet short-term obligations with its most liquid assets?
Asset Turnover Ratio
Debt-to-Equity Ratio
Current Ratio
Return on Equity (ROE)
#10
What does the P/E ratio indicate?
The return generated per dollar of equity
The amount an investor is willing to pay for each dollar of earnings
The efficiency of a company in utilizing its assets to generate revenue
The proportion of earnings paid out as dividends
#11
What does the DuPont analysis break down?
Operating expenses
Profit margins
Return on investment
Return on equity
#12
Which of the following is a leverage ratio?
Return on Investment (ROI)
Debt Ratio
Price-to-Book (P/B) Ratio
Dividend Yield
#13
What does the Altman Z-score assess?
A company's probability of bankruptcy
The market sentiment towards a company's stock
The level of risk associated with a company's investments
The efficiency of a company in managing its working capital
#14
What does the interest coverage ratio indicate?
A company's ability to meet its interest obligations
The efficiency of a company in managing its working capital
The proportion of earnings paid out as dividends
The return generated per dollar of equity
#15
What does the operating margin ratio measure?
A company's ability to generate profit from its sales
The efficiency of a company in managing its expenses
The efficiency of a company in managing its assets
A company's ability to meet short-term obligations with its most liquid assets
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