Question Paper Commerce

1. There is deterioration in the management of working capital of XYZ Ltd. What does it refer to?
A. That the Capital Employed has reduced
B. That the Profitability has gone up
C. That Debtors Collection period had increased
D. That Sales has decreased
Answer : C
2. Debt to Total Assets Ratio can be improved by:
A. Borrowing More
B. Issue of Debentures
C. Issue of Equity Shares
D. Redemption of Debt
Answer : D
3. Ratio of Net Income to Number of Equity Share known as:
A. Price Earnings Ratio
B. Net Proft Ratio
C. Earning per share
D. Dividend per share
Answer : C
4. A Current Ratio of less than one means:
A. Current Liabilities < Current Assets
B. Fixed Assets > Current Assets
C. Current Assets < Current Liabilities
D. Share Capital > Current Assets
Answer : C
5. A firm has Capital of rs. 10,00,000; Sales of Rs 5,00,000; Gross Profit of Rs. 2,00,000 and Expenses of Rs 1,00,000. What is the Net Profit Ratio ?
A. 20%
B. 50%
C. 10%
D. 40%
Answer : B
6. Suppliers and Creditors of a firm are interested in:
A. Profitability Position
B. Liquidity Position
C. Market Share Position
D. Debt Position
Answer : B
7. Which of the following is a measure of Debt Service capacity of a firm?
A. Current Ratio
B. Acid Test Ratio
C. Interest Coverage Ratio
D. Debtors Turnover
Answer : C
8. Gross Profit Ratio for a firm remains same but the Net Profit is decreasing. The reason for such behaviour could be:
A. Increase in Costs of Goods Sold
B. If Increase in Expense
C. Increase in Dividend
D. Decrease in Sales
Answer : B
9. Which of the following statements is correct?
A. A Higher Receivable Turnover is not desirable
B. Interest Coverage Ratio depends upon Tax Rate
C. Increase in Net Profit Ratio means increase in Sales
D. Lower Debt-Equity Ratio means lower Financial Risk
Answer : D
10. Debt to Total Assets of a firm is. 2. The Debt to Equity boo would be:
A. 0.80
B. 0.25
C. 1.00
D. 0.75
Answer : B
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