12 Accounting EA ratios

Which of the following ratios is not a profitability ratio

• A) turnover of accounts receivable
• B) return on total assets
• C) net profit ratio
• D) gross profit ratio

The ratio that would measure the percentage of assets or funds provided by the owner would be 

• A) equity ratio
• B) quick ratio
• C) current ratio
• D) debt ratio

Two ratios that are mirror of each other are

• A) debt ratio and equity ratio
• B) current ratio and quick ratio
• C) turnover of accounts receivable and turnover of accounts payable
• D) return on total assets and return on equity

Gross Profit Ratio

• A) Gross profit / Average sales
• B) Gross profit / Net sales
• C) Net profit / Net sales
• D) Net sales/ gross profit

The ratio that, according to a 'rule of thumb' should be about 2:1 is the 

• A) current ratio
• B) quick ratio
• C) equity ratio
• D) debt ratio

Which of the following ratios is a liquidity ratio

• A) turnover of accounts receivable
• B) debt ratio
• C) return on total assets ratio
• D) net profit ratio

A GP ratio result of 43.2% could be expressed as 

• A) gross profit is 4.32 cents in every dollar of sales
• B) gross profit is 4.32 cents in every dollar of net sales
• C) gross profit is 43.2 cents in every dollar of sales
• D) gross profit is 43.2 cents in every dollar of net sales

The ratio that will measure how much profit the total investment in assets has generated is

• A) net profit + interest revenue / average total assets
• B) net profit + interest expense / average total assets
• C) owner's equity / average total assets
• D) net profit / average owner's equity

Which ratio is not a stability ratio

• A) return on total assets ratio
• B) debt to equity ratio
• C) debt ratio
• D) equity ratio

The quick asset ratio can also be calculated as

• A) near cash assets + receivables / current liabilities
• B) current assets / current liabilities
• C) cash + near cash assets + receivables / current liabilities
• D) cash + near cash receivables / current liabilities