621. The long term use is 120% of long term source. This indicates the unit has
current ratio 1.2:1
Negative TNW
Low capitalization
Negative NWC
Correct answer: (D) Negative NWC
622. Current ratio is 4:1.Net Working Capital is Rs.30,000.Find the amount of currentAssets.
Rs. 10,000
Rs. 40,000
Rs.24,000
Rs.6,000
Correct answer: (B) Rs. 40,000
623. What type of ratios measure the liquidity of specific assets and the efficiency of managing assets?
Leverage ratios
Profitability ratios
Liquidity ratios
Activity ratios
Correct answer: (D) Activity ratios
624. What is the net trade cycle?
The amount of time needed to complete the normal operating cycle of a firm
The amount of time it takes to manufacture or buy inventory
The amount of time it takes to sell inventory
None of the above
Correct answer: (A) The amount of time needed to complete the normal operating cycle of a firm
625. Return on Investment may be improved by:
Increasing Turnover
Reducing Expenses
Increasing Capital Utilization
All of the above
Correct answer: (D) All of the above
626. Which of the following does not help to increase Current Ratio?
Issue of Debentures to buy Stock
Issue of Debentures to pay Creditors
Sale of Investment to pay Creditors
Avail Bank Overdraft to buy Machine
Correct answer: (D) Avail Bank Overdraft to buy Machine
627. A firm has Capital of Rs. 10,00,000; Sales of Rs. 5,00,000; Gross Profit of Rs. 2,00,000 and Expenses of Rs. 1,00,000. What is the Net Profit Ratio?
20%
50%
10%
40%
Correct answer: (A) 20%
628. Gross Profit Ratio for a firm remains same but the Net Profit Ratio is decreasing. The reason for such behavior could be:
Increase in Costs of Goods Sold
Increase in Expense
Increase in Dividend
Decrease in Sales
Correct answer: (B) Increase in Expense
629. In Inventory Turnover calculation, what is taken in the numerator?
Sales
Cost of Goods Sold
Opening Stock
Closing Stock
Correct answer: (B) Cost of Goods Sold
630. If a company revalues its assets, its networth: