Q: 1

Generally speaking, investors want to buy shares at which of the following price?

a) at face value

b) Below face value

c) Above face value

d) At market value

Correct answer: D

Q: 2
Current assets are those assets which management intends to convert into cash or consume
within:

a. The operating cycle

b. One year
c. The longer of operating cycle or one year

d. The shorter of operating cycle or one year

Correct answer: C

Q: 3
The Current Liabilities section of the balance sheet should include

a) Bonds Payable. b) Preferred Stock. c) Accounts

Payable.

Correct answer: C

Q: 4
Which of the following accounts would not be classified as an intangible?

a) Goodwill b) Patent c) Franchises

Correct answer: C

Q: 5
A figure from this year’s statement is compared with a base selected from the current year.

a) Vertical common-size statement b) Horizontal common-size statement c) fund statement

Correct answer: B

Q: 6
Statements in which all items are expressed only in relative terms (percentages of a base) are termed.

a) Vertical Statements b) Horizontal Statements c) Common-Size Statements

Correct answer: C

Q: 7
Liquidity ratios can be used:

a) to measure borrowing capacity b) to measure the earning ability of a firm

c) to measure the firm's ability to meet its current obligations

Correct answer: C

Q: 8
Analysis of any financial Statement comprises

a) Balance sheet b) P&L Account c) Both a & b

Correct answer: C

Q: 9
A snapshot of the financial condition of the firm at a particular time.
 a) The income statement provides b) The statement of cash flows provides c) Balance sheet

Correct answer: C

Q: 10
Which one techniques or methods are used of analysis and interpretation of financial statements?

Ratio Analysis b) Average Analysis c) Trend Analysis d) All of the above

Correct answer: D

Q: 11
leverage ratio measures the capability of the company to continue over a long period of time.

a) True

b) False

Correct answer: A

Q: 12
profitability ratio measure used to evaluate a company’s liquidity.

a) true

b) false

Correct answer: B

Q: 13
There are five main kinds of current assets. Which of the following is NOT among them?

a. Cash and equivalents

b. Deferred income
c. Accounts receivable

d. Prepaid expenses
Correct answer: B

Q: 14

1. Which report gives a review on the profitability of a business

a. Statement of changes in equity

b. Cash flow statement
c. Balance sheet
d. Income statement

Correct answer: D

Q: 15

1. Which of the followings is return paid to shareholders out of profit of a company?

a. profit
b. dividend
c. bonus shares
d. d. None of the above

Correct answer: B

Q: 16
Which of the given area is NOT addressed by Business Finance?

a) Financing

b) Investing

c) Managing day today expenses

d) None of the given options

Correct answer: D

Q: 17
The value of the firm usually based on value of debt and equity.

a. True

b. False

Correct answer: B

Q: 18
is concerned with the maximization of a firm's earnings after taxes.

a. Shareholder wealth maximization

b. Profit maximization
c. EPS maximization

Correct answer: B

Q: 19
How are earning per share calculated?

a. determine earnings after taxes and divide by the number of common shares outstanding.
b. Determine earnings after taxes and divided by previous period’s earnings after taxes and subtract
1 from the previous calculated value.
c. determine earnings after taxes (net income) and divide by the number of common and preferred
shares outstanding.

Correct answer: A
Q: 20
Finance is the study of how people and businesses evaluate investments and raise ______ to fund
them.

a) Capital

b) Working Capital

c) net working Capital

Correct answer: A

Q: 21
______ serves as a barometer for business performance.

a) Bond Price

b) dividend

c) Share price

Correct answer: C

Q: 22
it is the net value of an assets after deducting the laibility

a) dividend

b) investment

c) owner's equity

Correct answer: C

Q: 23
The only feasible purpose of financial management is

a) shareholders wealth Maximization

b) sales Maximization

c) Profit Maximization

d) Assets Maximization

Correct answer: A

Q: 24
Profit and Loss Account provide a details of the assets, liabilities and owner’s equity of a
business at a particular point in time.

a) True

b) False

Correct answer: B

Q: 25
Earnings Per share is earnings before taxes divided by total outstanding shares

a) true

b) false

Correct answer: B

Q: 26
___describes the management, creation and study of money, banking, credit, investments, assets and liabilities
that make up financial systems, as well as the study of those financial instruments

a) Financial Management

b) Finance

c) Investment management
Correct answer: B

Q: 27
Financial ratios are meaningless unless they are compared to a company standard, or historical or
industry data

a) True

b) False

Correct answer: A

Q: 28
usually dividend is paid on

a) Paid up share capital

b) issued share capital

c) Authorised capital

Correct answer: A

Q: 29
Financial statement are mainly focused towards the need of owners

a) True

b) False

Correct answer: A

Q: 30
________________ ratios measure the ability of a firm to earn an adequate return on sales,

total assets and invested capital.

a) Asset utilization

b) Liquidity

c) Profitability

d) Debt utilization

Correct answer: C

Q: 31
When assets are subtracted from liabilities it will be equal to?

(a) owner equity

(b) Net income

(c) Working capital

(d) Goodwill

Correct answer: A

Q: 32
Which of the following options is not recorded in the Balance sheet?

(a) Cash

(b) Rent expenses

(c) Building

(d) Goodwill

Correct answer: B

Q: 33
A current asset that can be transferred into cash within three months is known as:

(a) Cash equivalent

(b) Intangible asset

(c) Operating asset

(d) Cash asset

Correct answer: A

Q: 34
What are the earnings per share (EPS) for a company that earned $100,000 last year in after-tax
profits, has 200,000 common shares outstanding and $1.2 million in retained earnings at the year
end?

a) Rs. 0.50 b) Rs. 6.00 c) Rs. 0.60

Correct answer: A