1.

Redeemed debentures by issuing ordinary shares - Rate of return on ordinary shareholders’ equity

A. Increase

B. Decrease

C. Remain unchanged

D. None of the above

2. Purchased inventory on credit - Quick ratio

A. Increase

B. Decrease

C. Remain unchanged

D. None of the above

3. Sold inventory for cash - Current ratio

A. Increase

B. Decrease

C. Remain unchanged if sales price is equal to cost. Increase if sales price is greater than cost

D. None of the above

4. Issued additional ordinary shares for cash - Debt ratio (TOTAL LIAB/TOTAL ASSETS)

A. Increase

B. Decrease

C. Remain unchanged

D. None of the above

5.Declared a cash dividend on ordinary shares - Dividend payout (Dividend/Net income OR DPS/EPS)

A. Increase

B. Decrease

C. Remain unchanged
D. None of the above

6. Paid the cash dividend - Dividend yield (Cash dividend per share/market price per share)

A. Increase

B. Decrease

C. Remain unchanged

D. None of the above

7. The relationship between two financial variables can be expressed in ......

A. Pure ratio

B. Percentage

C. Rate or time

D. Either of the above

8. ABC Limited Profit and Loss Account for the year ended 31.03.2016 is given below, Turnover - 8030
Cost of sales - 4818 Distribution costs - 1606 Admin expenses - 600 Interest - 200 Tax - 286 Dividend -
320

Balance sheet as on 31.03.2016

Fixed assets Plant and machinery - 4000 Current assets = 2800 Stocks - 1800 Debtors - 960 Bank - 40
Current liabilities = 1100 Trade creditors - 520 Proposed dividend - 320 Taxation - 160 Accruals - 100

Net current assets - 1700

10% debenture - 2000

Financed by – 3700 Ordinary shares - 900

Retained profit - 2800 Calculate the following based on the above details.

1. Gross profit a. 1006 b. 2206 c. 3122 d. 3212

2. Operating profit a. 200 b. 520 c. 806 d. 1006

3. Profit before tax a. 200 b. 520 c. 806 d. 1006

4. Profit attributable to shareholders a. 200 b. 520 c. 806 d. 1006

Retained profit a. 200 b. 520 c. 806 d. 1006

6. Gross profit margin a. 12.53 % b. 17.65 % c. 33.33 % d. 40 %

7. Operating margin a. 12.53 % b. 17.65 % c. 33.33 % d. 40 %

8. Return on capital employed (ROCE) ratio a. 12.53 % b. 17.65 % c. 33.33 % d. 40 %

9. Current Ratio a. 1:0.91 b. 1:2.55 c. 0.91:1 d. 2.55:1

10. Acid test/Quick ratio a. 1:0.91 b. 1:2.55 c. 0.91:1 d. 2.55:1

9. From the below given information, calculate ...

Total Revenue - 1,00,000 Cost of Goods Sold - 20,000 Salaries - 10,000 Rent- 10,000 Utilities - 5,000
Depreciation - 5,000 Interest Expense - 10,000 Taxes - 10,000

1. Gross Profit a. 30,000 b. 50,000 c. 70,000 d. 80,000

2. Operating Expenses a. 30,000 b. 50,000 c. 70,000 d. 80,000

3. Total Expenses a. 30,000 b. 50,000 c. 70,000 d. 80,000

4. Net Profit a. 30,000 b. 50,000 c. 70,000 d. 80,000