## MCQ on Ratio Analysis | Corporate and Management Accounting MCQs for CS Executive and Other Competitive Exams

MCQ on Ratio Analysis: Check the below Corporate and Management Accounting MCQ on Ratio Analysis with Answers Pdf free download. Corporate and Management Accounting MCQ on Ratio Analysis Questions for Corporate and Management Accounting with Answers were prepared based on the latest exam pattern. We have provided Corporate and Management Accounting MCQ on Ratio Analysis with Answers to help students understand the concept very well. Students should practice CS Executive MCQ on Ratio Analysis Questions with Answers based on the latest syllabus.

## MCQ on Ratio Analysis

1. Which of the following is a method used in analyzing financial statements –
(A) Variance analysis
(B) Trend analysis
(C) Break-even analysis
(D) Budget analysis

(B) Trend analysis

2. ______ are necessary for the study of trends and direction of movements in the financial position and operating results of a concern.
(A) Trend ratios
(B) Cash flow statements
(C) Common size statements
(D) Comparative statements

(A) Trend ratios

3. In an organization, the current ratio is 2.5, the liquid ratio 1.5, prepaid expenses nil, and stock ₹ 4,000. The amount of current liabilities is –
(A) ₹ 20,000
(B) ₹ 40,000
(C) ₹ 80,000
(D) ₹ 4,000

(D) ₹ 4,000

4. In ratio analysis, ‘proforma analysis’ implies
(A) Making a list of all the present ratios of the firm
(B) Comparison of liquidity ratios with another kind of ratios of the firm
(C) Comparison of the ratios of the firm relating to the performance of the firm
(D) Comparison of the firm’s past and current ratios with future ratios to ascertain the relative strengths and weaknesses in the past and future

(D) Comparison of the firm’s past and current ratios with future ratios to ascertain the relative strengths and weaknesses in the past and future

5. Return on investment depends on two ratios
(A) Net profit ratio and capital turnover ratio
(B) Gross profit ratio and net profit ratio
(C) Capital employed ratio and assets turnover ratio
(D) Earnings per share and net profit ratio

(A) Net profit ratio and capital turnover ratio

6. Which of the following pairs is not correctly matched
(A) Dividend per equity share / Earnings per share = Payout ratio
(B) [Operating profit/Capital em-ployed] × 100 = Return on capital employed
(C) [(Cost of goods sold + operating expenses)/net sales] × 100 = Operating profit ratio
(D) None of the above

(D) None of the above

7. Which of the following pairs is correctly matched ?
(A) Profitability ratios = Expenses ratios
(B) Activity ratios = Total assets turnover ratio
(C) Both (A) and (B) above
(D) None of the above

(B) Activity ratios – Total assets turnover ratio

8. Return on investment is also known as
(A) Dupont chart
(B) Activity ratio
(C) P/V ratio
(D) Market test ratio

(A) Dupont chart

9. Which one of the following statements is correct ?
(A) Lower debt-equity ratio means lower financial risk
(B) Increase in net profit ratio means an increase in sales
(C) A higher receivable turnover is not desirable
(D) Interest coverage ratio depends upon the tax rate

(A) Lower debt-equity ratio means lower financial risk

10. Return on investment (ROI) is calculated to measure
(A) Long-term solvency of a business
(B) Earning power of net assets of the business
(C) Short-term liquidity position of business
(D) Goods sold and inventory level of business

(B) Earning power of net assets of the business

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