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Jacket
Business Accounting and Finance
Tony Davies, University of Wales, Lampeter, UK
Brian Pain, University of Luton, UK
Business performance analysis

Self-test Questions



1

Performance review of a business must
A)compare against the performance of a similar business within its industrial sector
B)compare against the performance of a similar business outside its industrial sector
C)compare against an appropriate standard for comparison
D)compare against a business of similar size
2

The quick ratio (or acid test) indicates
A)the speed with which profits are being made
B)the rate at which cash is being spent
C)the short-term liquidity of the business
D)the rate at which cash is being received
3

Questions 3 to 10 refer to the following diagram:

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=gif::ch05a::/sites/dl/free/0077098250/66362/ch05a.gif','popWin', 'width=556,height=516,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif">ch05a (50.0K)</a>ch05a

The gross profit ratio is

A)85%
B)15%
C)12%
D)10%
4

The operating profit ratio is
A)85%
B)15%
C)12%
D)10%
5

The return on capital employed (ROCE) % is
A)9.5%
B)14.2%
C)8.0%
D)3.3%
6

Average debtor collection days are
A)201
B)146
C)130
D)55
7

Average creditor payment days are
A)43
B)129
C)190
D)172
8

Stock turnover days are
A)172
B)236
C)107
D)214
9

The current ratio is
A)1.3
B)1.1
C)0.8
D)1.0
10

The quick ratio (acid test) is
A)1.1
B)0.8
C)0.6
D)1.0






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