#financial ratios

Ratio Analysis 2

Gearing Ratio indicates:

The relationship between loan funds and ratio analysis correct; liquidity profitability ratios calculation interpretation.

Ref: NCERT Accountancy Class XII Chapter 9 Ratio Analysis explains liquidity solvency profitability activity ratios calculation interpretation significance clearly.

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Ratio Analysis 2

What will be the current ratio of a company whose net working capital is zero?

1:1 ratio analysis correct; liquidity profitability ratios calculation interpretation.

Ref: NCERT Accountancy Class XII Chapter 9 Ratio Analysis explains liquidity solvency profitability activity ratios calculation interpretation significance clearly.

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Ratio Analysis 1

Which of the following groups of ratios primarily measure risk?

Liquidity, debt and profitabilty ratio analysis correct; liquidity profitability ratios calculation interpretation.

Ref: NCERT Accountancy Class XII Chapter 9 Ratio Analysis explains liquidity solvency profitability activity ratios calculation interpretation significance clearly.

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Ratio Analysis 1

Which ratio indicates the speed with which amount is being paid to the creditors?

Trade payables turnover ratio ratio analysis correct; liquidity profitability ratios calculation interpretation.

Ref: NCERT Accountancy Class XII Chapter 9 Ratio Analysis explains liquidity solvency profitability activity ratios calculation interpretation significance clearly.

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Ratio Analysis 1

If P Ltd obtains a Bank Loan of ₹ 30,00,000 payable after 5 years, then its proprietary ratio will

Decrease ratio analysis correct; liquidity profitability ratios calculation interpretation.

Ref: NCERT Accountancy Class XII Chapter 9 Ratio Analysis explains liquidity solvency profitability activity ratios calculation interpretation significance clearly.

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Ratio Analysis 1

What is the debt to equity ratio when the following information is available Total Assets ₹ 35,00,000; Total Debts ₹ 25,

1.7:1 ratio analysis correct; liquidity profitability ratios calculation interpretation.

Ref: NCERT Accountancy Class XII Chapter 9 Ratio Analysis explains liquidity solvency profitability activity ratios calculation interpretation significance clearly.

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Ratio Analysis 1

Purchase of machinery for cash will _____ the quick ratio.

decrease ratio analysis correct; liquidity profitability ratios calculation interpretation.

Ref: NCERT Accountancy Class XII Chapter 9 Ratio Analysis explains liquidity solvency profitability activity ratios calculation interpretation significance clearly.

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Ratio Analysis 1

Generally, a lower current ratio is considered better.

False ratio analysis correct; liquidity profitability ratios calculation interpretation.

Ref: NCERT Accountancy Class XII Chapter 9 Ratio Analysis explains liquidity solvency profitability activity ratios calculation interpretation significance clearly.

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Ratio Analysis 1

Ratios are comparable even if different accounting policies and procedures are followed by different firms.

False ratio analysis correct; liquidity profitability ratios calculation interpretation.

Ref: NCERT Accountancy Class XII Chapter 9 Ratio Analysis explains liquidity solvency profitability activity ratios calculation interpretation significance clearly.

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Ratio Analysis 1

What will be the effect on current ratio if a bills payable is discharged on maturity?

It will increase ratio analysis correct; liquidity profitability ratios calculation interpretation.

Ref: NCERT Accountancy Class XII Chapter 9 Ratio Analysis explains liquidity solvency profitability activity ratios calculation interpretation significance clearly.

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Ratio Analysis 1

Current ratio of Vidur Pvt. Ltd. is 3:2. Accountant wants to maintain it at 2:1. Following options are available (i) He

Only (i) is correct ratio analysis correct; liquidity profitability ratios calculation interpretation.

Ref: NCERT Accountancy Class XII Chapter 9 Ratio Analysis explains liquidity solvency profitability activity ratios calculation interpretation significance clearly.

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Ratio Analysis 1

A ratio reflects quantitative as well as qualitative aspects of results.

False ratio analysis correct; liquidity profitability ratios calculation interpretation.

Ref: NCERT Accountancy Class XII Chapter 9 Ratio Analysis explains liquidity solvency profitability activity ratios calculation interpretation significance clearly.

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