Reference no: EM132539629

Problem 1: The formula for the profit margin ratio is:

a. revenue/profit.
b. profit after tax/total assets.
c. profit after tax/revenues.
d. gross profit/net sales.

Problem 2: A profit ratio for a retailer of 4.1% in year 2 compared to 5.5% for the previous year indicates:

a. an improving profit margin.
b. a declining profit margin.
c. no change in the profit margin.
d. impending bankruptcy.

Problem 3: Annual dividend per ordinary share divided by market price per ordinary share measures:

a. dividend yield.
b. dividend per share.
c. dividend payout ratio.
d. earnings per share.

Problem 4: Ratios are normally divided into three general groups, which of these is not one of those groups?

a. Profitability ratios
b. Liability ratios
c. Liquidity ratios
d. Financial stability ratios

Problem 5: To calculate the current (working capital) ratio it is necessary to:

a. divide profit by current assets.
b. divide revenue by current assets.
c. divide current assets by current liabilities.
d. divide current liabilities by current assets.