Ratio Analysis - Overall Profitability Ratios: Net Profit ratio - MCQs

Ratio Analysis - Overall Profitability Ratios: Net Profit ratio - MCQs


1. Overall Profitability ratios are based on

a) Investments
b) Sales
c) a & B
d) None of the above

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ANSWER: a) Investments



2. Return on Proprietors’ funds is also known as:

a) Return on net worth
b) Return on Shareholders’ fund
c) Return on Shareholders’ Investment
d) All of the above

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ANSWER: d) All of the above



3. Return on equity capital is calculated on basis of:

a) Funds of equity shareholders
b) Equity capital only
c) Either a or b
d) None of the above

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ANSWER: c) Either a or b



4. While calculating Earnings per share, if both equity and preference share capitals are there, then

a) Preference share is deducted from the net profit
b) Equity share capital is deducted from the net profit
c) Both a and b
d) None of the above

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ANSWER: a) Preference share is deducted from the net profit


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