Financial Statements Analysis and Ratio Analysis MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Financial Statements Analysis and Ratio Analysis, a fundamental topic in the field of IC 89 Management Accounting. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our Financial Statements Analysis and Ratio Analysis MCQs are designed to help you grasp the core concepts and excel in solving problems.

In this section, you'll find a wide range of Financial Statements Analysis and Ratio Analysis mcq questions that explore various aspects of Financial Statements Analysis and Ratio Analysis problems. Each MCQ is crafted to challenge your understanding of Financial Statements Analysis and Ratio Analysis principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC 89 Management Accounting tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our Financial Statements Analysis and Ratio Analysis MCQs are your pathway to success in mastering this essential IC 89 Management Accounting topic.

Note: Each of the following question comes with multiple answer choices. Select the most appropriate option and test your understanding of Financial Statements Analysis and Ratio Analysis. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

So, are you ready to put your Financial Statements Analysis and Ratio Analysis knowledge to the test? Let's get started with our carefully curated MCQs!

Financial Statements Analysis and Ratio Analysis MCQs | Page 4 of 10

Discover more Topics under IC 89 Management Accounting

Discuss
Answer: (c).(Commission Direct - Commission on Reinsurance Ceded) / Net Premium Explanation:The Commission Ratio is calculated as (Commission Direct - Commission on Reinsurance Ceded) / Net Premium.
Discuss
Answer: (a).Management Expenses / Net Premium Explanation:The Management Expense Ratio is computed as Management Expenses / Net Premium.
Discuss
Answer: (a).Claims Paid Direct - Claims on Reinsurance Ceded Explanation:Net Incurred Claim is calculated as Claims Paid Direct - Claims on Reinsurance Ceded in non-life insurance companies.
Discuss
Answer: (b).Efficiency and efficacy of the employment of resources Explanation:Activity Ratios measure the efficiency and efficacy of the employment of resources in financial management.
Discuss
Answer: (c).Rate of return on sales and rate of return on the capital employed Explanation:The overall profitability in financial management depends on the rate of return on sales and the rate of return on the capital employed.
Q36.
How is the Stock Turnover Ratio calculated when opening and closing stock figures don't widely vary?
Discuss
Answer: (a).Cost of Goods Sold / Average Stock Explanation:When opening and closing stock figures don't widely vary, the Stock Turnover Ratio is calculated as Cost of Goods Sold / Average Stock.
Q37.
In the insurance sector, what is considered for segment-wise Activity Analysis in terms of premium collection?
Discuss
Answer: (b).First Year Premium, Renewal Premium, and Single Premium Explanation:In the insurance sector, segment-wise Activity Analysis in terms of premium collection includes First Year Premium, Renewal Premium, and Single Premium.
Q38.
What does Activity Analysis in the insurance sector include in respect of Benefits paid to policyholders?
Discuss
Answer: (b).Death Claim, Maturity Claim, Annuities/ pension payment, Surrenders, etc. Explanation:Activity Analysis in the insurance sector in respect of Benefits paid to policyholders includes Death Claim, Maturity Claim, Annuities/ pension payment, Surrenders, etc.
Q39.
What is the primary focus of Solvency Ratio in financial management?
Discuss
Answer: (b).Long-term financial stability Explanation:The primary focus of Solvency Ratio in financial management is long-term financial stability.
Discuss
Answer: (c).It is a regulatory requirement to maintain the solvency margin Explanation:Maintaining the Required Solvency Margin is a regulatory requirement in insurance companies.