I Interpretation of financial statements

Trade receivables are $18,000 and credit sales are $150,000. What is the receivables collection period?

• 1 12.0 days
• 2 43.8 days
• 3 8.3 days
• 4 43.2 days

Current assets are $70,000 including inventories of $25,000. Current liabilities are $35,000. What is the quick ratio?

• 1 0.71:1
• 2 1.29:1
• 3 0.64:1
• 4 2.00:1

Profit before financing and income taxes is $45,000. Total assets are $400,000 and current liabilities $100,000. What is the return on capital employed?

• 1 45%
• 2 12%
• 3 11.2%
• 4 15%

Which ratio measures how efficiently an entity uses its resources?

• 1 Interest cover
• 2 Inventory holding period
• 3 Quick ratio
• 4 Gearing

A longer receivables collection period compared with last year most likely suggests:

• 1 Lower inventory levels
• 2 Slower collection from customers or more generous credit terms
• 3 A fall in credit sales only
• 4 Faster collection from customers

Debt is $200,000 and equity is $300,000. Gearing is calculated as debt / (debt + equity). What is it?

• 1 150%
• 2 40%
• 3 67%
• 4 60%