Ratio Analysis MCQs

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Topic Notes: Ratio Analysis

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Master Ratio Analysis MCQs for Competitive Exams with our comprehensive, verified question bank. Designed for students and competitive exam aspirants across Pakistan, this study resource provides topic-wise practice questions for CSS, PMS, FPSC, PPSC, SPSC, KPPSC, BPSC, NTS, and university entry tests.

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Preparation Guide & Key Focus Areas for Ratio Analysis MCQs

When preparing for Ratio Analysis MCQs (Commerce), focus on core definitions, historical timelines, relevant provisions, and commonly tested factual points. Review each question below, test your knowledge against the given options, and inspect the detailed explanation to solidify your understanding.

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311

Which financial ratio is characterized by a high value indicating lower profitability?

312

Which of the following transactions does not result in a change to the current ratio?

313

How is the inventory turnover ratio calculated in relation to the cost of inventory consumed during a specific period?

314

In the context of ratio analysis, what does 'time series analysis' involve?

A the comparison of financial ratios over a period of time to access the direction of change and the financial performance of the firm B a comparison of time values for various ratios of the firm C making a time series of various ratio to assess the firm's profitability D a graphical comparison of the firm's sources of finance

315

Given Debtors of Rs. 8,400, a Reserve for Bad Debts of Rs. 400, Cost of Sales of Rs. 36,000, and a Profit margin of 40% on sales, calculate the debt collection period.

316

Calculate the rate of return on shareholders' equity given: Net Profit Rs. 225,000, Taxes Rs. 25,000, and Net Worth Rs. 1,000,000.

317

Evaluate the following assertion and reason regarding the debt-equity ratio.

A Both (A) and (R) are correct, but (R) does not explain (A) correctly B Both (A) and (R) are correct, and (R) is the correct reason for (A) C (A) is correct, but (R) is incorrect D (A) is incorrect, but (R) is correct

318

Which financial ratio is determined by dividing total common equity by the number of common shares outstanding?

319

What is the standard formula for calculating Earnings Per Share (EPS)?

A $$\frac{{{\text{Net Income}}- {\text{Preference Dividend}}}}{{{\text{Number of Equity Shares}}}}$$ B $$\frac{{{\text{Total Income}}}}{{{\text{Paid-up Capital}}}}$$ C $$\frac{{{\text{Net Income}}}}{{{\text{Number of Equity Shares}}}}$$ D $$\frac{{{\text{Net Income}}}}{{{\text{Number of Shares}}}}$$

320

Calculate the stock turnover ratio given an opening stock of Rs. 80,000, a closing stock of Rs. 1,00,000, and a cost of goods sold of Rs. 3,60,000.

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