Ratio Analysis Quiz

Calculate the Current Ratio for this business based on the data given

• 0.83:1

• 83%

• 0.88:1

• 75%

Calculate the Gearing Ratio based on the data given to two decimal places.

• 16.4%

• 164%

• 62.22%

• 62.2%

Based on the data given, what would be the new Gearing Ratio if the business took out a long term loan of £50m?

• 73.33%

• 66%

• 78%

• 80%

A business has a current ratio of 2.5, current assets of £4.5million and inventories of £1.5million. What are the current liabilities of the business?

• £0.25m

• £0.6m

• £1.2m

• £1.8m

Which Financial Ratio would provide the best insight into how effectively a business is controlling its total costs?

• Gross Profit Margin

• Operating Profit Margin

• Return on Capital Employed

• Current Ratio