Financial Management

691. Which of the following helps analysing return to equity Shareholders?

  1. Return on Assets
  2. Earnings Per Share
  3. Net Profit Ratio
  4. Return on Investment
Correct answer: (B)
Earnings Per Share

692. 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 worth of the firm?

  1. Rs.12 lac
  2. Rs.8 lac
  3. Rs.4 lac
  4. Rs.2 lac
Correct answer: (B)
Rs.8 lac

693. In last year the current ratio was 3:1 and quick ratio was 2:1. Presently current ratio is 3:1 but quick ratio is 1:1.This indicates comparably

  1. high liquidity
  2. higher stock
  3. lower stock
  4. low liquidity
Correct answer: (B)
higher stock

694. Properietory ratio is calculated by

  1. Total assets/Total outside liability
  2. Total outside liability/Total tangible assets
  3. Fixed assets/Long term source of fund
  4. Properietors'Funds/TotalTangible Assets
Correct answer: (D)
Properietors'Funds/TotalTangible Assets

695. If a firm sold stock on credit then which of the following would be the result ?

  1. Acid Test Ratio increases
  2. Acid test ratio decreases
  3. Current ratio decreases
  4. Current ratio increases
Correct answer: (B)
Acid test ratio decreases

696. The ability of a firm to convert an asset to cash is called ______________.

  1. Liquidity
  2. Solvency
  3. Return
  4. Marketability
Correct answer: (A)
Liquidity

697. ______________ capital structure means an ideal combination of borrowed and owned capital that may attain the marginal goal.

  1. Preference share
  2. Optimum
  3. Equity
  4. Debt
Correct answer: (B)
Optimum

698. The appropriate objective of an enterprise is:

  1. Maximisation of sale
  2. Maximisation of owners wealth
  3. Maximisation of profits
  4. None of these
Correct answer: (B)
Maximisation of owners wealth

699. A financial statement is an:

  1. Written report that quantitatively describes a firm's financial health
  2. Set of ratios which depict relationships between a firm's financial Items
  3. Itemized forecast of a company's income, expenses, and capital Needs
  4. Estimate of a firm's future income and expenses
Correct answer: (A)
Written report that quantitatively describes a firm's financial health

700. A firm's ______________ reflects the results of its operations over a specified period and shows whether it is making a profit or is experiencing a loss

  1. Statement of cash flows
  2. Balance sheet
  3. Statement of owners' equity
  4. Income statement
Correct answer: (D)
Income statement
Page 70 of 78