/40 Welcome to your Financial Analysis Diploma Exam Read the full study material ... Click here Start the exam ⇓ 1 / 40 The conflict of interest between stockholders and management is known as: Agency problem Management conflict Interest conflict Agency cost 2 / 40 If value of opening inventories increases, what happens to the value of gross profit? Increases Stays the same Gets closer to net profit Decreases 3 / 40 The finance manager is accountable for: effective management of a fund arrangement of financial resources proper utilization of funds earning capital assets of the company 4 / 40 The process of explaining the meaning, significance and relationship between two financial factors is called ….............. Interpretation Summarization Analysis 5 / 40 Which of the following is NOT a key ratio in the prediction of bankruptcy as developed by Edward Altman? Current ratio Debt to equity Retained earnings as a percent of total assets Total assets 6 / 40 As per Companies Act, the Balance Sheet of a company is required to be presented in ……………………… Either horizontal or vertical form Horizontal form Vertical Form Neither of the mentioned 7 / 40 Financial statements are ____________. unknown facts recorded facts estimated of facts anticipated facts 8 / 40 Bills Receivables appear in a Company’s Balance Sheet under the Sub-head …………………….. Cash equivalents Trade receivables Short term loans and advances Current investments 9 / 40 Which of the following refers to the difference between the sale price and cost of inventory? Net worth Markdown Markup Net loss 10 / 40 According to prescribed order of assets in a Company’s Balance Sheet ……………………… assets should be shown first of all. Current assets Loans and advances Current investments Non-current assets 11 / 40 Which report gives a review on the profitability of a business? Income statement Cash flow statement Balance sheet Statement of changes in equity 12 / 40 In common size income statement analysis, which is taken as 100 percent? Total assets Cost of goods sold Sales Purchases 13 / 40 Which of the following is not included in current assets. Cash in hand Cash at bank Debtors Stock 14 / 40 Cash inflows arise from _____ assets, ________ liabilities, and ___________ stockholders' equity. decreasing; increasing; increasing increasing; decreasing; decreasing decreasing; increasing; decreasing increasing; increasing; decreasing 15 / 40 Which of the following are techniques, tools or methods of analysis and interpretation of financial statements? All answer are correct Trend analysis Average analysis Ratio analysis 16 / 40 Vertical analysis is made on the basis of __________. multiple sets of financial statements different schedules attached to financial statements single set of financial statements similar set of financial statement 17 / 40 In financial statement the stock is valued at cost or market price whichever is less on the basis of …........... accounting concepts accounting conventions accounting principles 18 / 40 Horizontal analysis is done by analyzing ____________. Financial statements of several years Financial statements of a particular year Quarterly statement Half yearly statement 19 / 40 Financial statements are meaningful and useful only when they are ___________. Analyzed and interpreted Presented to owners Verified Published 20 / 40 Which is the following main decision taken by the financial manager in a company? Appraisal decision Financing decision Income decision Budget decision 21 / 40 Which of the following is technique of financial statement analysis? Comparative statement Common‐size statement Trend analysis All answers are correct 22 / 40 Working capital turnover ratio can be determined by: gross profit / working capital cost of goods sold / working capital cost of goods sold / net sales 23 / 40 Subtracting all expenses from revenues yields? Net profit / Net loss Net liabilities Carrying value Long term assets 24 / 40 The following are the examples of financial assets except? Raw material Bond Bank loan Stocks 25 / 40 Interpretation of accounts is the ........ Art and science of translating the figures To know the causes for the prevailing performance of business All Answers are correct To know financial strengths and weaknesses of a business 26 / 40 P&L statement is also known as: Statement of operations All of the answers are correct Statement of earnings Statement of income 27 / 40 __________ analysis is the process of studying a series of ratios for a company and/or industry overtime. Common size Trend DuPont 28 / 40 The term ‘Financial Statement’ covers Profit & Loss statement and balance sheet Profit & Loss statement Balance sheet and profit & loss statement appropriation account All of the answers are false 29 / 40 The relationship between two financial variables can be expressed in: percentage rate or time pure ratio All answers are correct 30 / 40 Which of the following statement is considered as the accountant’s snapshot of firm’s accounting value as of a particular date? Balance sheet Cash flow statement Retained earning statement Income statement 31 / 40 Incorrect cash flow planning can lead to ________ Insolvency Failure Bankruptcy Solvency 32 / 40 Balance Sheet is based upon which of the following formula? assets + liabilities = stockholder’s equity assets + stockholder’s equity = liabilities assets = liabilities + stockholder’s equity assets = liabilities – stockholder’s equity 33 / 40 Which of the following is not a function of finance manager? Manipulate share price of the company Deployment of funds Mobilization of funds Control over use of funds 34 / 40 The statement of cash flows tells us: Accounting profit or loss How cash was created Actual profit or loss 35 / 40 In financial statements, the fixed assets are shown at …...... replacement price market price cost price 36 / 40 Analysis of any financial Statement comprises P&L account Balance sheet All answers are correct Trading account 37 / 40 Liquidity ratios are expressed in: pure ratio form percentage rate or time 38 / 40 Which of the following is not required to be prepared under the Companies Act? Report of director’s and auditor’s Statement of profit and loss Funds flow statement Balance Sheet 39 / 40 What will be the Gross Profit if , total sales is $260,000,cost of net goods sold is $200,000 & sales return is $10,000 ? 26% 28% 13% 20% 40 / 40 Funds are required for the .................. Purchase of land & building Purchase of machinery Purchase of another fixed asset All of the answers are correct 0% Restart quiz
