22 Questions
What does the Gross Profit Margin measure?
Percentage of revenue available to cover operating and other expenditures
What does ROE (Return on Equity) measure?
Net income in relation to equity
What does ROIC (Return on Invested Capital) measure?
EBIT in relation to equity and net debt
What does the Quick Ratio measure?
The company's ability to meet short-term liabilities with its most liquid assets
What does the Cash Conversion Cycle (CCC) represent?
The time it takes for a company to convert its investments in inventory and other resources into cash flows from sales
What does the Long-term Debt to Equity Ratio (L/E Ratio) indicate?
How much debt a company is using to finance its assets relative to the value of shareholders’ equity
What is the purpose of the Interest Coverage Ratio (EBIT basis)?
To show the number of times a firm’s income would cover interest expenses
What does the Debt Ratio (Total Liabilities/Total Assets) show?
The proportion of a company's assets which are financed through debt
What does the Working Capital Ratio (WC ratio) measure?
Operating working capital to annual sales
What is the purpose of the Interest Coverage Ratio (CF Basis)?
To show the number of times a firm’s cash flows from operations would cover interest expenses
What does the Debt to Equity Ratio (L/A Ratio) indicate?
The ratio of long-term debt to total equity, also known as the 'Gearing' ratio
What does the Net Profit Margin measure?
The percentage of each dollar in revenue that is available to shareholders after paying interest and taxes
What does the Return on Assets (ROA) measure?
The company's ability to generate profit from its assets
What does the Return on Invested Capital (ROIC) measure?
The company's overall profitability and the efficiency with which its capital is being used
What does the Cash Conversion Cycle (CCC) represent?
The time it takes for a company to convert inventory into cash
What does the Debt to Equity Ratio (L/A Ratio) indicate?
The proportion of a company's assets financed through debt
What does the Interest Coverage Ratio (CF Basis) measure?
The number of times a firm’s income would cover interest expenses
What does the Quick Ratio measure?
The company's ability to meet short-term liabilities with its most liquid assets
What does the Interest Coverage Ratio (EBIT basis) indicate?
The company's ability to cover its interest expenses from its earnings before interest and taxes
What does the Working Capital Ratio (WC ratio) measure?
The company's ability to cover its short-term liabilities with its most liquid assets
What does the Long-term Debt to Equity Ratio (L/E Ratio) indicate?
How much debt a company is using to finance its assets relative to the value of shareholders’ equity
What does the Total Liabilities/Total Assets Ratio show?
The proportion of a company's assets which are financed through debt
Test your knowledge of financial statement analysis with this quiz. Explore key metrics such as gross profit margin and operating profit margin to assess a company's profitability and ability to meet debt obligations. Gain a deeper understanding of operating performance and its impact on financial health.
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