1. Foundations

Financial Ratios — Quiz

Test your understanding of financial ratios with 5 practice questions.

Practice Questions

Question 1

What does the current ratio measure?

Question 2

If a company has a net income of $$ \$400,000 $ and total sales of $ \$2,000,000 $$, what is its net profit margin?

Question 3

Which ratio is used to assess a company's efficiency in using its assets to generate sales?

Question 4

A company has total liabilities of $$ \$600,000 $ and total equity of $ \$400,000 $$. What is its debt-to-equity ratio?

Question 5

What does a high return on equity (ROE) indicate about a company?