Financial statement analysis: ratio, funds flow, cash flow - Question Bank
1. Which ratio measures the profitability of a company relative to its total assets?
2. The formula for the Debt-to-Equity Ratio is:
3. A company with a high inventory turnover ratio generally indicates:
4. The ratio of Current Assets to Current Liabilities is known as the:
5. Under the indirect method, an increase in accounts payable is added to net income because:
6. Which section of the cash flow statement includes transactions like issuing stock or paying dividends?
7. In a funds flow statement, 'payment of dividend' is considered a:
8. Funds Flow Statement reconciles the beginning and ending balance of:
9. The formula for Net Profit Margin is:
10. A company's ability to pay its long-term obligations is best assessed by which type of ratio?
11. The Earnings Per Share (EPS) ratio is calculated as:
12. Which of the following is typically classified as a cash inflow from investing activities?
13. Under the indirect method, a gain on the sale of an asset is subtracted from net income because:
14. The Cash Flow Statement is prepared based on the principles of:
15. Which of the following is a source of funds?
16. An increase in a current asset (e.g., accounts receivable) in a funds flow statement signifies:
17. Which financial statement is primarily used to analyze the sources and applications of working capital?
18. A high profit margin indicates:
19. The formula for the Receivables Turnover Ratio is:
20. Which ratio helps in assessing the operational efficiency of a company's inventory management?
21. When using the indirect method, an increase in inventory is subtracted from net income because:
22. Which of the following is a cash outflow from financing activities?
23. Under the direct method, cash paid to suppliers is calculated by adjusting Cost of Goods Sold for:
24. The objective of preparing a cash flow statement is to provide insights into:
25. Which of the following is a common use of funds?
26. In a funds flow statement, 'decrease in bills payable' would be treated as:
27. A decrease in Working Capital signifies:
28. The Cash Conversion Cycle (CCC) measures the time it takes for a company to:
29. Which ratio measures how efficiently a company is using its assets to generate sales?
30. The formula for the Gross Profit Margin is:
31. A company with a low inventory turnover ratio might indicate:
32. The Quick Ratio is also known as the:
33. Which ratio is calculated as Sales / Average Total Assets?
34. A decrease in accounts payable would be treated as a _______ in the operating activities section (indirect method) of a cash flow statement.
35. The primary purpose of a cash flow statement is to provide information about:
36. Which of the following activities would result in a cash inflow from financing activities?
37. Depreciation expense is added back to net income when using the indirect method because:
38. Under the indirect method, net income is adjusted for non-cash expenses and revenues, and changes in:
39. Which of the following is typically classified as a cash outflow from investing activities?
40. Under the direct method of preparing the operating activities section of a cash flow statement, cash receipts from customers are calculated by adjusting sales revenue for:
41. A cash flow statement classifies cash movements into three main activities: Operating, Investing, and:
42. Which of the following items would be considered a 'use' of funds in a funds flow statement?
43. If a company purchases machinery for cash, this would be shown as a _______ of funds in the funds flow statement.
44. The primary objective of a funds flow statement is to show:
45. Which of the following is NOT a source of funds in a funds flow statement?
46. In a funds flow statement, an increase in current assets (other than cash) and an increase in current liabilities would typically:
47. Funds flow statement primarily focuses on the movement of:
48. Which ratio is used to assess a company's ability to pay interest on its outstanding debt?
49. The formula for Return on Equity (ROE) is:
50. A high Debt-to-Equity Ratio generally indicates: