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 8 of 10

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Discuss
Answer: (c).The percentage of incurred claims to net premium Explanation:In the context of non-life insurance companies, the Incurred Claim Ratio measures the percentage of incurred claims to net premium.
Q72.
What accounting ratio is used to assess the effectiveness and efficiency of the employment of resources in non-life insurance companies?
Discuss
Answer: (b).Activity Ratios Explanation:Activity Ratios are used to assess the effectiveness and efficiency of the employment of resources in non-life insurance companies.
Discuss
Answer: (c).Analyzing the firm's liquidity Explanation:The primary focus of financial statement analysis is on analyzing the firm's liquidity.
Q74.
Who are the stakeholders that have a special interest in ratio analysis based on financial statements?
Discuss
Answer: (b).Investors, shareholders, suppliers, competitors, tax authority, and regulators Explanation:Investors, shareholders, suppliers, competitors, tax authority, and regulators are stakeholders with a special interest in ratio analysis based on financial statements.
Discuss
Answer: (b).Meeting current or short-term obligations Explanation:The purpose of liquidity ratios is to indicate the ability of the firm to meet its current or short-term obligations.
Q76.
Which of the following is NOT a profitability ratio?
Discuss
Answer: (c).Debt-Equity Ratio Explanation:Debt-Equity Ratio is not a profitability ratio.
Discuss
Answer: (a).General profitability Explanation:The Gross Profit Ratio expresses the general profitability.
Q78.
What is the primary focus of Operating Ratios/Expense Ratios?
Discuss
Answer: (c).Measuring effectiveness of operations Explanation:Operating Ratios/Expense Ratios focus on measuring the effectiveness of operations.
Q79.
What types of ratios do expense ratios comprise in non-life insurance companies?
Discuss
Answer: (d).Incurred Claim Ratio, Commission Ratio, Management Expense Ratio Explanation:Expense ratios in non-life insurance companies comprise Incurred Claim Ratio, Commission Ratio, and Management Expense Ratio.
Discuss
Answer: (c).Effectiveness and efficacy of resource employment Explanation:Activity ratios measure the effectiveness and efficacy of the employment of resources in the business.