Question

1. The _____________ analysis involves taking all of the absolute figures on the company’s financial statements and converting them to percentages.

   • ratio
   • trend
   • common-size
   • All of the above.

2. Which of the following is a category in ratio analysis?

   • market ratios
   • profitability ratios
   • liquidity ratios
   • All of the above.

3. With ___________ analysis, you choose a particular base year and set every single figure in that year’s financial statement equal to 100%. You then look at subsequent years, comparing each individual line in the financial statements to the base year and dividing one by the other.

   • ratio
   • trend
   • common-size
   • turnover

4. Common-size analysis is usually just a starting point for even greater analysis and inquiry.

   • True
   • False

5. Ratio that tells us the profitability of the company in relation to how much was earned on the assets for the period

   • Return on assets
   • Return on equity
   • Net profit margins
   • Current ratio

6. An example of a market valuation is

   • Return on equity ratio
   • Acid test ratio
   • Gross profit ratio
   • Price to earnings ratio

7. Total current assets / current liabilities = ______________.

   • current ratio
   • return on equity
   • return on investment
   • accounts payable turnover ratio

Answer 1

1	Ratio, Trend, Common-size, all these analysis involves the process of converting the ablute figures into percentage
	So Option D is answer
2	Market ratios, Profitability ratio and Liquidity ratio all are part of Ratio Analysis
	So Option D is answer
3	Common-Size statement requires to set a base year and compare individual line items of Financial statements
	So Option C is answer
4	The Statement is TRUE
5	Return on Assets =Net Income / Average Total Assets
	So it is clear that how much of profit is earned on the Assets invested
	So Option A is answer
6	An example of Market valuation is Price earnings ratio(P/E ratio) which is equal to Market Price per share / EPS.
	So Option D is answer
7	Current Ratio =Current Assets / Current Liabilities
	So Option A is answer