#1
Which financial ratio measures a company's ability to generate profits from its resources?
Current ratio
Return on assets (ROA)
Debt-to-equity ratio
Inventory turnover ratio
#2
What does the debt-to-equity ratio indicate about a company?
Its ability to pay off its short-term debts
Its reliance on debt financing versus equity financing
Its efficiency in managing inventory
Its ability to generate profit relative to its total assets
#3
What does the price-to-earnings (P/E) ratio indicate about a company?
Its ability to generate profit from its assets
Its current stock price relative to its earnings per share
Its efficiency in managing inventory turnover
Its level of debt compared to its equity
#4
Which financial ratio measures a company's ability to cover its short-term liabilities with its short-term assets?
Current ratio
Quick ratio
Debt ratio
Return on investment (ROI)
#5
What does the gross profit margin measure?
The efficiency of a company's asset utilization
The proportion of revenue remaining after deducting the cost of goods sold
The effectiveness of a company's debt management
The return on investment for shareholders
#6
Which financial ratio is calculated by dividing net income by average total assets?
Gross profit margin
Operating profit margin
Return on assets (ROA)
Return on equity (ROE)
#7
What does a high quick ratio indicate about a company?
High liquidity and strong ability to meet short-term obligations
Low liquidity and potential difficulty in paying short-term debts
High profitability and efficient use of assets
High reliance on debt financing
#8
What does the inventory turnover ratio measure?
The efficiency of a company's inventory management
The profitability of a company's sales
The level of debt in a company's capital structure
The return on investment for shareholders
#9
What does a high debt ratio indicate about a company?
High profitability
Low financial risk
High reliance on debt financing
Efficient asset management
#10
What does the return on equity (ROE) ratio indicate about a company?
Its profitability relative to its total assets
Its ability to generate profit from its shareholder investments
Its efficiency in managing inventory
Its liquidity position
#11
Which financial ratio assesses a company's ability to cover its interest expenses with its earnings before interest and taxes (EBIT)?
Operating profit margin
Times interest earned ratio
Debt ratio
Asset turnover ratio
#12
Which financial ratio assesses a company's ability to turn its inventory into sales?
Debt-to-equity ratio
Accounts receivable turnover ratio
Inventory turnover ratio
Return on investment (ROI)
#13
What does a low accounts receivable turnover ratio suggest about a company?
Efficient collection of accounts receivable
High liquidity
Slow collection of outstanding debts
High profitability
#14
Which financial ratio measures the proportion of debt a company uses to finance its assets?
Times interest earned ratio
Debt-to-equity ratio
Quick ratio
Return on investment (ROI)
#15
What does a high fixed charge coverage ratio suggest about a company?
High profitability
Low financial risk
High reliance on fixed assets
Sufficient income to cover fixed expenses