Question

Question 5

Which of the following ratios cannot be calculated without the income statement?

	Current ratio
	Debt to Equity ratio
	Quick Ratio
	Gross Profit Margin

Question 6

A snapshot of the financial position of a business at a point in time is called the

	Balance Sheet
	Income Statement
	Statement of Retained Earnings
	Cashflow Satement

Question 7

Which of the following ratios requires information from both the income statement and balance sheet?

	Return on Equity
	Current Ratio
	Gross Profit Margin
	Debt to Equity

Question 8

The purpose of the statement of cash flow is:      

	to identify the sources of cash
	to determine the profits of the business
	to identify the sources and uses of cash
	to show the assets & liabilities of the business

Answer 1

(5) Which of the following ratios cannot be calculated without the income statement?

Gross Profit Margin

In Gross Profit margin, we need Gross Profit and Sales.

(6) A snapshot of the financial position of a business at a point in time is called the

Balance Sheet

A balance sheet is like a photograph which shows financial position of a business at a point in time

(7) Which of the following ratios requires information from both the income statement and balance sheet?

Return on Equity

In Return on Equity, we need Net Income from income statement & Stockholders Equity from Balance sheet

(8) The purpose of the statement of cash flow is:      

to identify the sources and uses of cash

Under cash Flow statement, we need to prepare Operating Activities, Investing activities & Financing activities due to identification of cash inflow or outflow from different sources