Ratio Analysis - Turnover Ratios - MCQs with answers

Ratio Analysis - Turnover Ratios - MCQs with answers


1. Turnover ratios are also known as

a) Activity ratios
b) Performance ratios
c) Both a and b
d) None of the above

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ANSWER: c) Both a and b



2. The lower turnover ratio highlights the under utilizations of the resources accessible at the disposal of the firm.

a) True
b) False

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ANSWER: a) True



3. Stock velocity established a relationship between

a) Cost of goods sold in a given period and the average amount of inventory held during that period.

b) Cost of goods sold in a given period and the average amount of stock held during that period.

c) Both a and b

d) None of the above

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ANSWER: c) Both a and b



4. Determine stock turnover ratio if, Opening stock is Rs 31,000, Closing stock is Rs 29,000, Sales is Rs 3,20,000 and Gross profit ratio is 25% on sales.

a) 31 times
b) 11 times
c) 8 times
d) 32 times

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ANSWER: c) 8 times



5. Debtors Turnover ratio is also known as

A) Receivables turnover ratio
B) Debtors velocity
C) Stock velocity
D) Payable turnover ratio

a) A and B
b) A and C
c) B and C
d) C and D

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ANSWER: a) A and B



6. Determine Debtors turnover ratio if, closing debtors is Rs 40,000, Cash sales is 25% of credit sales and excess of closing debtors over opening debtors is Rs 20,000.

a) 4 times
b) 2 times
c) 6 times
d) 8 times

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ANSWER:a) 4 times



7. Working capital turnover ratio can be determined by:

a) (Gross Profit/Working capital)
b) (Cost of goods sold/Net sales)
c) (Cost of goods sold/Working capital)
d) None of the above

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ANSWER: c) (Cost of goods sold/Working capital)



8. Determine Working capital turnover ratio if, Current assets is Rs 1,50,000, current liabilities is Rs 1,00,000 and Cost of goods sold is Rs 3,00,000.

a) 5 times
b) 6 times
c) 3 times
d) 1.5 times

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ANSWER: b) 6 times


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