Financial Management

721. Working Capital Turnover measures the relationship of Working Capital with:

  1. Fixed Assets
  2. Sales
  3. Purchases
  4. Stock
Correct answer: (A)
Fixed Assets

722. In Net Profit Ratio, the denominator is:

  1. Net Purchases
  2. Net Sales
  3. Credit Sales
  4. Cost of goods sold
Correct answer: (B)
Net Sales

723. Debt to Total Assets Ratio can be improved by:

  1. Borrowing More
  2. Issue of Debenture
  3. Issue of Equity Shares
  4. Redemption of Debt
Correct answer: (D)
Redemption of Debt

724. Which of the following is a measure of Debt Service capacity of a firm?

  1. Current Ratio
  2. Acid Test Ratio
  3. Interest Coverage Ratio
  4. Debtors Turnover
Correct answer: (C)
Interest Coverage Ratio

725. Return on Assets and Return on Investment Ratios belong to:

  1. Liquidity Ratios
  2. Profitability Ratios
  3. Solvency Ratios
  4. Turnover
Correct answer: (B)
Profitability Ratios

726. If a company issues bonus shares the debt equity ratio will

  1. Remain unaffected
  2. Will be affected
  3. Will improve
  4. none of the above
Correct answer: (C)
Will improve

727. Authorised capital of a company is Rs.5 lac,40% of it is paid up.Loss incurred during the year is Rs.50,000. Accumulated loss carried from last year is Rs.2 lac. The company has a Tangible Net Worth of

  1. Nil
  2. Rs.2.50 lac
  3. (-)Rs.50,000
  4. Rs.1 lac
Correct answer: (C)
(-)Rs.50,000

728. Quick assets do not include

  1. Govt.bond
  2. Book debts
  3. Advance for supply of raw materials
  4. Inventories
Correct answer: (D)
Inventories

729. Financial leverage means

  1. Use of more debt capital to increase profit
  2. High degree of solvency
  3. Low bank finance
  4. None of the above
Correct answer: (A)
Use of more debt capital to increase profit

730. Creditors would not be interested in which group of ratios ?

  1. Solvency
  2. Shareholder
  3. Profitability
  4. Capital Structure
Correct answer: (B)
Shareholder
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