ACCOUNTING for Everyone

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AFE Quiz 25: Financial Ratios and Analysis

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  1. What does the current ratio measure?




  2. Which formula is used to calculate the debt-to-equity ratio?




  3. What does the gross profit margin indicate?




  4. Which ratio measures how quickly a company collects its receivables?




  5. How is return on equity (ROE) calculated?




  6. What does the inventory turnover ratio measure?




  7. Which ratio indicates a company’s ability to meet short-term obligations without relying on inventory?




  8. What does the price-to-earnings (P/E) ratio measure?




  9. Which ratio measures profitability after all expenses, including taxes and interest?




  10. What does a high debt-to-equity ratio generally indicate?




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