MCQ on Advance Financial Management 4

Objective Questions and Answers of MBA: MCQ on Advance Financial Management 4

Subject: Objective Questions and Answers of MBA: MCQ on Advance Financial Management 4

Q1. Which of the following falls under Profitability ratios?

A) General Profitability ratios

B) Overall Profitability ratios

C) Comprehensive Profitability ratios

a) A and B

b) A and C

c) B and C

d) None of the above

Q2. General Profitability ratios are based on

a) Investments

b) Sales

c) A and B

d) None of the above

Q3. Gross Profit ratio is also termed as

a) Gross Profit Margin

b) Gross Margin to net sales

c) Both a and b

d) All of the above

Q4. While calculating Gross Profit ratio

a) Closing stock is deducted from cost of goods sold

b) Closing stock is added to cost of goods sold

c) Closing stock is ignored

d) None of the above

Q5. While calculating Gross Profit, if net profit is given

a) It can be converted into gross profit by adding interest to it

b) It can be converted into Gross profit by adding indirect expenses to it

c) Both a and b

d) None of the above

Q6. Gross profit ratio is calculated by

a) (Gross Profit/Gross sales)*100

b) (Gross Profit/Net sales)*100

c) (Net Profit/Gross sales)*100

d) None of the above

Q7. Given Sales is 1, 20,000 and Gross Profit is 30,000, the gross profit ratio is

a) 24%

b) 25%

c) 40%

d) 44%%

Q8. What will be the Gross Profit if, total sales is Rs 2,60,000 Cost of net goods sold is Rs 2,00,000 and Sales return is Rs 10,000?

a) 13%

b) 28%

c) 26%

d) 20%

Q9. If selling price is fixed 25% above the cost, the Gross Profit ratio is

a) 13%

b) 28%

c) 26%

d) 20%

Q10. Gross Profit ratio should be adequate to cover

a) Selling expenses

c) Dividends

d) All of the above

Q11. Net Profit ratio is calculated by

a) (Gross Profit/Gross sales)*100

b) (Gross Profit/Net sales)*100

c) (Net Profit/Net sales)*100

d) None of the above

Q12. If sales is Rs 5, 00,000 and net profit is Rs 1, 20,000 Net Profit ratio is

a) 24%

b) 416%

c) 60%

d) None of the above

Q13. If sales is Rs 10,00,000, sales returns is Rs 50,000, Profit Before Tax is Rs 2,00,000, Income tax is 40%, Net profit ratio is

a) 12.63%

b) 20%

c) 10%

d) 50%

Q14. Net operating profit ratio determines ___________ while net profit ratio determines

a) Overall efficiency of the business, working efficiency of the management

b) Working efficiency of the management, overll efficiency of the business

c) Overall efficiency of the external market, working efficiency of the internal management

d) None of the above

Q15. Operating ratio is calculated by

a) (Operating Cost/Gross sales)*100

b) (Operating Cost/Gross sales)*100

c) (Operating cost/Net sales)*100

d) None of the above

Q16. Determine Operating ratio, if operating expenses is Rs 60,000, Sales is Rs 9,40,000, Sales Return is Rs 40,000 and Cost of net goods sold is Rs 6,60,000

a) 80%

b) 15%

c) 25%

d) 11%

Q17. Overall Profitability ratios are based on

a) Investments

b) Sales

c) a and B

d) None of the above

Q18. Return on Proprietors’ funds is also known as

a) Return on net worth

b) Return on Shareholders’ fund

c) Return on Shareholders’ Investment

d) All of the above

Q19. Return on equity capital is calculated on basis of

a) Funds of equity shareholders

b) Equity capital only

c) Either a or b

d) None of the above

Q20. While calculating Earnings per share, if both equity and preference share capitals are there, then

a) Preference share is deducted from the net profit

b) Equity share capital is deducted from the net profit

c) Both a and b

d) None of the above