Question : Comparative financial data are then analyzed with reference to financial characteristics like profitability, solvency and liquidity are called ______.
Option 1: Comparison
Option 2: Ratio Analysis
Option 3: Interpretation
Option 4: All of the above
Correct Answer: Ratio Analysis
Solution : Answer = Ratio Analysis
Ratio analysis examines line-item data from the financial statements of an organisation to provide information about solvency, profitability, liquidity, and operational effectiveness. Hence, the correct option is 2.
Question : The liquidity ratio is also called________?
Option 1: Long-term solvency Ratio
Option 2: Medium-term solvency Ratio
Option 3: Short-term solvency Ratio
Question : Which of the following are techniques, tools or methods of analysis and interpretation of financial statements?
Option 1: Ratio Analysis
Option 2: Average Analysis
Option 3: Trend Analysis
Question : The working capital ratio is part of __________ ratio?
Option 1: Solvency Ratio
Option 2: Profitability Ratio
Option 3: Activity Ratio
Option 4: Liquidity Ratio
Question : Which of the following ratio is the "Current Ratio"?
Question : The objectives of Ratio Analysis are
Option 1: To locate the weak spots of business which need more attention.
Option 2: To provide a deeper analysis of the liquidity, solvency, activity and profitability of the business.
Option 3: To provide information for making a cross-sectional analysis, i.e., for making a comparison with that of some selected firms in the same industry.
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile