Practice Financial Statement and Ratio Analysis Questions and Answers

• Match the following Ratios A)     Overall profitability ratio                       1) Gearing Ratio B)      Efficiency rati...
• Which of the following will be considered as debt while calculating the debt equity ratio of a company?
• Which of the following is NOT the feature of Discounted cash flow Analysis?
• The ratio of a firm’s property, plant, and equipment, net of accumulated depreciation, to its annual depreciation expense is an estimate of:
•   Which of the following ratios is very important to assess the eligibility of a borrower for a Term Loan?
• Which of the following statements are not true regarding the issuance of a bank guarantee? 1.    All bank guarantees have an expiry period a...
• Which of the following statements about Mortgage are not true? 1.    Under a mortgage, the legal ownership of the asset can be transferred to the lende...
• Given the following information: Revenue from Operations 3,40,000 Cost of Revenue from Operations 1,20,000 Selling expenses 80,000 Administrative Expen...
• Which of the following statement is true regarding standard costing?
• The PBT of a company is 2,00,000, preference dividend Rs.25,000, and taxes paid Rs.15,000. The number of equity shares is 1,00,000. The earnings per share ...
• A company’s current ratio is 1.5:1 and current liabilities are ₹4,00,000. What are its current assets?
• If share capital is ₹10 lakh, reserves ₹5 lakh, and accumulated losses ₹3 lakh, Deffered tax liabilities are ₹1 lakh, provision for gratuity is ₹...
• In a cash flow statement, issuance of shares is classified under:
• The sale of an old vehicle for ₹2,00,000 (book value ₹2,50,000) will be reported in the cash flow statement as:
• A company repaid a long-term loan of ₹3,00,000 during the year. How is this reported in the cash flow statement?
• A company has current assets ₹6,00,000, inventory ₹2,50,000, prepaid expenses ₹50,000, and current liabilities ₹3,00,000. Calculate the quick ratio...
• If cash inflow from operations is ₹12 lakh, investing cash outflow is ₹5 lakh, and financing inflow is ₹3 lakh, what is net cash flow?
• COGS is ₹30 lakh and average inventory is ₹5 lakh. What is inventory turnover ratio?
• If net income is ₹10 lakh and number of equity shares is 2 lakh, what is the EPS?
• A holding company is required to prepare consolidated financial statements. The financials of which of the following will be includes in the consolidated f...
• All its JV IT Ltd has total current assets worth ₹9,00,000, of which inventory is ₹2,00,000. Current liabilities stand at ₹5,60,000. What will be its...
• GB Ltd is preparing its Cash Flow Statement. Which of the following will be recorded under the investing activity?
• Which of the following is not a source of funds for a company?
• Schedule III Part 2 of the Companies Act, 2013, pertains to the Format of ______?
• Calculate the EBIT of the company given the following details: Sales: ₹20,00,000  Cost of Goods Sold: ₹14,00,000  Operating Expenses: ₹3,00,000  I...
• Use Direct method to calculate the net cash from operations of the company given the following transactions?  Sales in the year: ₹6,50,000  Cash receiv...
• Based on the below information, calculate the net cash flow of the company from operating activities?  Net Profit = ₹1,80,000  Depreciation = ₹40,000...
• VG Ltd shared the following details from its Balance sheet at the end of the year. What is its Current Ratio?  ...
• GH Ltd took a term loan of Rs.24 crore for a period of 20 years to be repaid in equal annual instalments. The interest is 10% p.a. on reducing balance. The...
• A company has a Debt-to-Equity ratio of 2:1. It purchases a new plant for ₹5,00,000, financing it entirely by taking a long-term loan. What will be the n...
• Given: Net Profit ₹4,00,000; Tax Rate 30%; Equity Share Capital ₹10,00,000 (Face Value ₹10). The Return on Equity (ROE) is:
• The ratio that measures the efficiency with which a firm utilizes its assets to generate sales is:
• If you want to understand the financial performance of a company over a specific accounting period, which of the following financial statement will be usef...
• An entity, other than a financial institution, receives the dividends from the shares it owns in certain companies. The entity, while preparing its cash fl...
• Which of the following is correct about the liquidity position of a company whose current ratio is 2.5, and quick ratio is only 0.9? 
• A company took a term loan of Rs.50 lakh from the bank in December 2025. If the loan has to be repaid in 5 equal yearly instalments starting from December ...
• Which of the following best differentiates impairment from depreciation?
• Which of the following is likely to increase the trade receivables collection period? 
• A company earned a Net Profit of ₹1,00,000. If the Net Sales is ₹12,50,000, out of which ₹10,00,000 is cash sales and remaining is credit sales, what...
• Under which of the following head will repayment of loan be shown in a cash flow statement?