Analysis of financial statements Objective Questions

COMPANY ACCOUNTS :

1. Critical evaluation of financial statement to measure profitability. (Analysis of financial statement)

2. The statement showing profitability of two different periods and its percentage change. (comparative income statement)

3. The tool for analysis of financial statement where, individual figures of balance sheet is converted into percentage. (Common size balance sheet)

4. The type of activity in cash flow analysis, involving purchase of fixed assets. (Investing activity)

5. A Particular mathematical number showing relationship between two accounting figures. (Ratio)

6. An asset which can be converted into cash immediately. (Liquid asset)

7. The ratio measuring the relationship between gross profit and net sales. (Gross Profit ratio)

8. The ratio measuring the relationship between net profit and ownership capital employed. (ROCE)

9. The statements showing the financial position for different periods as previous year and current year. (Comparative Balance sheet)

10. Statement showing changes in cash and cash equivalent during a particular period. (Cash Flow Statement)

11. The short term highly liquid investments which can be readily converted into cash and with the least risk of change in values. (Cash equivalent)

12. Activities related to acquisition or disposal of long term assets and investments. (Financing activity)

13. The ratio that establishes the relationship between quick assets and current liabilities. (Liquid ratio)

14. The ratio that establishes the relationship between current assets and current liabilities. (Current ratio)

15.The ratio that measures a relationship between net profit before tax, interst and capital invested. (ROI ratio)