MCQs on Ratio Analysis (Financial management-module-c)

1) In the Balance sheet of a firm,the debt equity ratio is 2:1.The amount of long term
sources is Rs.12 lac.What is the amount of tangible net orth of the firm!
a) Rs.12 lac. b) Rs.8 lac c) Rs." lac. d) Rs.2 lac.
2) #ebt $quity Ratio is %:1,the amount of total assets Rs.2& lac,current ratio is 1.':1
and oned funds Rs.% lac.What is the amount of current asset!
a) Rs.' lac b) Rs.% lac c) Rs.12 lac d)none of the abo(e.
%) Ban)s generally *refer #ebt $quity Ratio at :
a) 1:1 b) 1:% c)2:1 d) %:1
") If a com*any re(alues its assets,its netorth :
a) Will impo!e b) Will remain same c) Will be *ositi(ely affected d) +one of
the abo(e.
') If a com*any issues bonus shares the debt equity ratio ill
a) Remain unaffected b) Will be affected c) Will impo!e d) none of the abo(e.
,) -n asset is a
a) .ource of fund b) "se o# #und c) Inflo of funds d) none of the abo(e.
/) In the balance sheet amount of total assets is Rs.1& lac, current liabilities Rs.' lac
0 ca*ital 0 reser(es are Rs.2 lac .What is the debt equity ratio!
a)111 b) 1.':1 c)2:1 d)none o# t$e a%o!e.
2) The long term use is 12&3 of long term source.This indicates the unit has
a) current ratio 1.2:1 b) +egati(e T+W c)4o ca*itali5ation d)&egati!e &WC.

6) In last year the current ratio as %:1 and quic) ratio as 2:1.7resently current ratio
is %:1 but quic) ratio is 1:1.This indicates com*arably
a) high liquidity b) $ig$e stoc' c) loer stoc) d) lo liquidity
1&) -uthorised ca*ital of a com*any is Rs.' lac,"&3 of it is *aid u*.4oss incurred
during the year is Rs.'&,&&&.-ccumulated loss carried from last year is Rs.2
lac.The com*any has a Tangible +et Worth of
a) +il b) Rs.2.'& lac c) (-)Rs.()*))) d) Rs.1 lac.
11) The degree of sol(ency of to firms can be com*ared by measuring
a) +et orth b) Tangible +et Worth c) -sset co(erage ratio d) +ol!ency Ratio.
12) 7ro*erietory ratio is calculated by
a) Total assets8Total outside liability b) Total outside liability8Total tangible assets
c) 9i:ed assets84ong term source of fund d) ,opeietos-Funds./otal
/angi%le Assets.
1%) ;urrent ratio of a concern is 1,its net or)ing ca*ital ill be
a) 7ositi(e b) +egati(e c) &il d) +one of the abo(e
1") ;urrent ratio is ":1.+et Wor)ing ;a*ital is Rs.%&,&&&.9ind the amount of current
-ssets.
a) Rs.1&,&&& b) Rs.0)*))) c) Rs.2",&&& d) Rs.,,&&&
1') ;urrent ratio is 2:'.;urrent liability is Rs.%&&&&.The +et or)ing ca*ital is
a) Rs.12,&&& b) Rs."',&&& c) Rs.<=) "',&&& d) Rs.(-)18)))
1,) >uic) assets do not include
a) ?o(t.bond b) Boo) debts c) -d(ance for su**ly of ra materials d)
1n!entoies.
1/) The ideal quic) ratio is
a) 2:1 b) 1:1 c) ':1 d) +one of the abo(e
12) - (ery high current ratio indicates
a) @igh efficiency b) flabby in(entory c) *osition of more long term funds
d) % o c
16) 9inancial le(erage means
a) "se o# moe de%t capital to incease po#it b) @igh degree of sol(ency
c) 4o ban) finance d) +one of the abo(e
2&) The ca*ital gearing ratio is high for a com*any.It indicates a *osition of
a) 4o debts b) high *reference ca*ital c) high equity d) lo debt equity
ratio.