#1
Which financial statement provides a snapshot of a company's financial position at a specific point in time?
Balance Sheet
ExplanationProvides a snapshot of assets, liabilities, and equity at a specific time.
#2
What does the Cash Flow Statement show?
Cash receipts and cash payments
ExplanationDetails cash inflows and outflows during a period.
#3
What does the Current Ratio measure?
A company's ability to pay off short-term liabilities with current assets
ExplanationAssesses liquidity by comparing current assets to current liabilities.
#4
Which financial ratio measures a company's ability to generate profit from its revenue?
Net Profit Margin
ExplanationShows the proportion of net income to total revenue.
#5
Which financial ratio measures a company's ability to cover its interest expenses with its earnings before interest and taxes (EBIT)?
Interest Coverage Ratio
ExplanationIndicates how well earnings can cover interest payments.
#6
What does the Debt to Equity Ratio indicate about a company's financial structure?
The proportion of long-term debt to shareholder equity
ExplanationShows the balance between debt and equity financing.
#7
What does the Quick Ratio assess about a company's liquidity?
The company's ability to pay off its current liabilities using its most liquid assets
ExplanationEvaluates liquidity using the most liquid assets.
#8
What does Free Cash Flow represent?
The cash available after capital expenditures and dividends are paid
ExplanationReflects cash generated after accounting for investments and dividends.
#9
What does the Operating Cash Flow Ratio measure?
A company's ability to cover its operating expenses with its operating cash flow
ExplanationAssesses if operating cash flow can cover operating expenses.
#10
Which financial ratio measures a company's efficiency in managing its inventory?
Inventory Turnover Ratio
ExplanationShows how quickly inventory is sold and replaced.
#11
What does the Cash Conversion Cycle (CCC) measure?
The time it takes for a company to convert its operating profit into cash flow
ExplanationIndicates the efficiency of cash flow from operations.
#12
Which financial ratio indicates a company's ability to meet its short-term obligations with its most liquid assets?
Quick Ratio
ExplanationMeasures short-term liquidity using liquid assets.