Finance Quiz

What does ROCE stand for?

• Return on Capital Employed

• Return on Current Equity

• Revenue on Capital Employed

• Return on Cash Earnings

How is the current ratio calculated?

• Current Assets / Current Liabilities

• Current Liabilities / Current Assets

• Total Assets / Total Liabilities

• Total Liabilities / Total Assets

Which of the following is a measure of liquidity?

• Gross Profit Margin

• Quick Ratio

• Return on Equity

• Debt to Equity Ratio

What is the formula for the quick ratio?

• (Current Assets - Inventory) / Current Liabilities

• Current Assets / Current Liabilities

• (Current Assets + Inventory) / Current Liabilities

• Current Liabilities / Current Assets

Efficiency ratios are used to measure:

• A company's profitability

• A company's liquidity

• How well a company uses its assets

• A company's market share

Calculate the Return on Capital Employed (ROCE) if the operating profit is £50,000 and the capital employed is £200,000.

• 20%

• 25%

• 30%

• 35%

If a company has current assets of £150,000 and current liabilities of £100,000, what is the current ratio?

• 1.0

• 1.5

• 2.0

• 2.5

A company has current assets of £120,000, inventory of £30,000, and current liabilities of £80,000. What is the quick ratio?

• 1.0

• 1.125

• 1.5

• 1.75

Calculate the inventory turnover ratio if the cost of goods sold is £500,000 and the average inventory is £100,000.

• 4 times

• 5 times

• 6 times

• 7 times

What is the break-even point?

• The point where total revenue equals total costs

• The point where total revenue exceeds total costs

• The point where total costs exceed total revenue

• The point where fixed costs equal variable costs