Finance Mcqs

Q.  If a firm uses cash to purchase inventory, its quick ratio will?

a. Increase
b. Decrease
c. Remain unaffected
d. Become zero


ANSWER: See Answer
 
When inventory is purchased for cash, the cash is converted into inventories and there is no effect on net current assets. The current assets remain the same as before the purchase of inventory the current ratio will not be changed. Quick ratio, however, will be reduced if the cash is converted into inventories because while computing quick ratio inventories are not added but cash is included in quick assets. (Quick assets / current liab.) Quick assets = current assets-inventories.
TasDia Network - Mcqs | Signature | Lyrics
MCQs:  The effect of purchasing power or inflation on present value is important because _________?
Category: MBA Questions,   Published by: T-Code Scripts
MCQs:  An Asset is __________?
Category: MBA Questions,   Published by: T-Code Scripts
MCQs:  If a company revaluates its fixed assets, the current ratio of the company will:
Category: MBA Questions,   Published by: T-Code Scripts
MCQs:  If we were studying a sample of 100 students and their examination performance and if the standard deviation of the list of results was say 14, then we could calculated the standard error by ___________?
Category: MBA Questions,   Published by: T-Code Scripts
MCQs:  Rule of 72 as a short cut method is explained by the formula:
Category: MBA Questions,   Published by: T-Code Scripts
MCQs:  The Capital Asset Pricing Model calculate expected:
Category: MBA Questions,   Published by: T-Code Scripts
MCQs:  A technique uses in comparative analysis of financial statement is____________?
Category: MBA Questions,   Published by: T-Code Scripts
MCQs:  Net income available to stockholders is $125 and total assets are $1,096 then return on common equity would be________?
Category: MBA Questions,   Published by: T-Code Scripts
MCQs:  Price per share is $30 and an earnings per share is $3.5 then price for earnings ratio would be_____________?
Category: MBA Questions,   Published by: T-Code Scripts
MCQs:  Formula such as net income available for common stockholders divided by total assets is used to calculate__________________________?
Category: MBA Questions,   Published by: T-Code Scripts
MCQs:  Price per ratio is divided by cash flow per share ratio which is used for calculating___________?
Category: MBA Questions,   Published by: T-Code Scripts
MCQs:  A techniques uses to identify financial statements trends are included____________?
Category: MBA Questions,   Published by: T-Code Scripts
MCQs:  Companies that help to set benchmarks are classified as__________?
Category: MBA Questions,   Published by: T-Code Scripts
MCQs:  Total assets divided common equity is a formula uses for calculating___________?
Category: MBA Questions,   Published by: T-Code Scripts
MCQs:  Price per share divided by earnings per share is formula for calculating_________?
Category: MBA Questions,   Published by: T-Code Scripts
MCQs:  In independent projects evaluation, results of internal rate of return and net present value lead to_____________?
Category: MBA Questions,   Published by: T-Code Scripts
MCQs:  Company low earning power and high interest cost cause financial changes which have_____________?
Category: MBA Questions,   Published by: T-Code Scripts
MCQs:  Projects which are mutually exclusive but different on scale of production or time of completion then the__________________?
Category: MBA Questions,   Published by: T-Code Scripts
MCQs:  A point where profile of net present value crosses horizontal axis at plotted graph indicates project____________________?
Category: MBA Questions,   Published by: T-Code Scripts
MCQs:  Profit margin multiply assets turnover multiply equity multiplier is used to calculate____________?
Category: MBA Questions,   Published by: T-Code Scripts