Sample Questions - Ratio Analysis
1. What are the three major financial statements?
2. Why is it complicated to compare a given ratio of two companies operating in different sectors/industries?
3. Provide two examples of:
a. Liquidity ratios
b. Profitability ratios
4. Discuss the purpose of liquidity ratios.
5. Discuss the purpose of profitability ratios.
The following is Bunny Backer's balance sheet and income statement. Use the information on the financial statements to answer questions 6 - 10
6. What was Bunny Backers' current ratio for the year 20XX.
7. What was Bunny Backers' debt ratio for the year 20XX
8. Compute Bunny Backers' operating margin for the year 20XX.
9 (a). Calculate Bunny Backers' working capital for the year 20XX.
(b). Calculate Bunny Backers' gross profit margin for the year 20XX.
10 (a). Determine Bunny Backers's Return on Equity (ROE).
(b). Determine Bunny Backers's Return on Assets (ROA).