Ratio - Edubook - Multiple choice questions
5 important questions on Ratio - Edubook - Multiple choice questions
The profit of a business amounts to € 159,000 after deduction of interest. The average interest rate is 4.9%. The size of the debts for which a compensation must be paid amounts to € 7,361,000. What is the interest coverage ratio?
Interest: € 7,361,000 × 4.9% = € 360,689
Operating result: € 159,000 + € 360,689 = € 519,689
Interest coverage ratio: € 519,689 / € 360,689 = 1.44
A business has € 2,400,000 of assets. Two third of these consist of fixed assets. Half of the current assets consists of stock. A quarter of the assets is financed with equity. The current debts amount to € 450,000. What is the net working capital?
What will happen in the long term with the return on assets if a loan, for which interest must be paid, is redeemed with money that is contributed to the business by the business owners? The rest remains the same.
The ROA will remain the same.
- Higher grades + faster learning
- Never study anything twice
- 100% sure, 100% understanding
Which of the measures below will increase the financial resilience of a company?
- A loan from an investor is subordinated to provide the bank with a higher security interest.
An overdraft facility at the bank (11%) is converted into a loan (6%).- The costs are reduced while the turnover remains the same.
As of 31 December year 1, the following has been provided for company Maksimi:
- The net working capital is - € 14,200 (so negative);
- The current assets have a value of € 83,800;
- The quick ratio is 0.25.
What is the value of inventories as at 31 December year 1?
Net working capital = current assets - current liabilities - € 14,200 = € 83,800 + current liabilities =
Current liabilities = € 98,000
Quick ratio = (Current assets - inventories) / current liabilities
0.25 = (€ 83,800 - inventories) / € 98,000
0.25 × € 98,000 = € 83,800 - inventories =
€ 24,500 = € 83,800 - inventories
Inventories = € 83,800 - € 24,500 = € 59,300
The question on the page originate from the summary of the following study material:
- A unique study and practice tool
- Never study anything twice again
- Get the grades you hope for
- 100% sure, 100% understanding