Quiz On Financial Analysis

20 Questions

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Financial Analysis Quizzes & Trivia

In the financial world, for a business to be a going concern, it has to be stable, profitable and viable. A financial analyst is therefore, expected to assess these conditions and generate a report on the findings. Are you on your way to becoming a financial analyst? Take the quiz see just how ready you are.


Questions and Answers
  • 1. 
    Financial analysis includes which of the following steps?
    • A. 

      Establishing facts about an organization    

    • B. 

      Comparing facts about an organization over time    

    • C. 

      Making decisions on the basis of fact comparisons    

    • D. 

      All of the above    

  • 2. 
    The four types of ratios used in financial analysis are
    • A. 

      liquidity, profitability, activity, capital structure    

    • B. 

      Capital structure, current, profitability, activity    

    • C. 

      Revenue and expense, liquidity, capital structure, activity    

    • D. 

      Plant and equipment, activity, capital structure, liquidity    

  • 3. 
    • A. 

      It measures an organization's performance by computing the relationships of important line items in the financial statements.    

    • B. 

      It looks at the internal structure of the organization by comparing a base number and percentages of important line items.    

    • C. 

      It evaluates the trend in line items by looking at the percentage change in the line items over time.    

    • D. 

      None of the above

  • 4. 
    The balance sheet displays an organization’s
    • A. 

      Assets, liabilities, and expenses    

    • B. 

      revenues, expenses, and assets    

    • C. 

      net assets, liabilities, and assets    

    • D. 

      Net assets, revenues, and expenses    

  • 5. 
    • A. 

      Which assets have been moved from permanently restricted to unrestricted    

    • B. 

      Why net assets changed from the beginning of the statement period to the end of the statement period    

    • C. 

      Which assets have been moved from temporarily restricted to unrestricted    

    • D. 

      Why net assets have changed over the life of the organization

  • 6. 
    Which of the following accounts does NOT appear on the statement of operations?
    • A. 

      Shareholders’ equity    

    • B. 

      Operating expenses    

    • C. 

      Depreciation    

    • D. 

      Net assets released from restrictions used for operations

  • 7. 
    • A. 

      To make financial decisions    

    • B. 

      To determine the profitability of the organization in the future    

    • C. 

      To analyze the financial performance of the organization in previous years    

    • D. 

      To predict the future and plan strategies that will influence the future

  • 8. 
    Which of the following describes liquidity ratios?
    • A. 

      They measure the amount of time an organization takes to turn its assets into cash.    

    • B. 

      They are measures of an organization’s ability to meet short-term obligations.    

    • C. 

      They reflect an organization’s long-term liquidity.    

    • D. 

      They measure an organization’s ability to exist and grow.    

  • 9. 
    Which of the following ratios is NOT a liquidity ratio?
    • A. 

      Operating margin    

    • B. 

      Current ratio    

    • C. 

      Average payment period    

    • D. 

      Days cash on hand

  • 10. 
    A current ratio is
    • A. 

      calculated with current assets and current liabilities    

    • B. 

      The basic indicator of financial liquidity    

    • C. 

      calculated by dividing total current assets by total current liabilities    

    • D. 

      all of the above    

  • 11. 
    • A. 

      They measure the relationship of revenues to expenses.    

    • B. 

      They determine how profitable an organization is.    

    • C. 

      They measure an organization’s profitability across years.    

    • D. 

      They reflect an organization’s efficiency.    

  • 12. 
    Which of the following is a profitability ratio?
    • A. 

      Inventory turnover    

    • B. 

      Current ratio    

    • C. 

      Excess margin    

    • D. 

      Debt services coverage    

  • 13. 
    Higher values indicate profitability in which of the following profitability ratios?
    • A. 

      Return on net assets    

    • B. 

      Operating margin    

    • C. 

      Excess margin    

    • D. 

      All of the above    

  • 14. 
    • A. 

      They measure how efficiently assets can be converted into cash.    

    • B. 

      They measure the relationship between assets and revenues.    

    • C. 

      They indicate the overall liquidity of the organization.    

    • D. 

      They measure an organization’s long-term liquidity.

  • 15. 
    Which of the following is NOT an asset efficiency ratio?
    • A. 

      Inventory turnover    

    • B. 

      Total asset turnover    

    • C. 

      Return on net assets    

    • D. 

      Current asset turnover    

  • 16. 
    Lower values are preferable for which of the following asset efficiency ratios?
    • A. 

      Total asset turnover    

    • B. 

      Inventory turnover    

    • C. 

      Current asset turnover    

    • D. 

      Fixed asset turnover    

  • 17. 
    Capital structure ratios measure
    • A. 

      The relationship between an organization’s invested capital and long-term liabilities    

    • B. 

      An organization’s ability to meet short-term obligations    

    • C. 

      An organization's long-term liquidity    

    • D. 

      The amount of profit an organization can earn from capital investments    

  • 18. 
    Which of the following is a capital structure ratio?
    • A. 

      Inventory turnover    

    • B. 

      Net asset financing    

    • C. 

      Debt services coverage    

    • D. 

      (b) and (c)

  • 19. 
    Which of the following is NOT an operating indicator?
    • A. 

      Average length of stay    

    • B. 

      Days cash on hand    

    • C. 

      Occupancy rate    

    • D. 

      Outpatient revenue as a percentage of total patient revenue    

  • 20. 
    Good financial reports have which of the following characteristics?
    • A. 

      Accurate    

    • B. 

      Meaningful    

    • C. 

      Detailed    

    • D. 

      (a) and (b)