16(

You are given the following data for Nizwa Company: A company's net income from 2018 is 5 billion Rial, they paid a 3 billion dividends to shareholders over the course of the year, and they have 4 billion shares outstanding, the retention ratio is:

a.

40%

b.

20%

c.

60

d.

None of these

17)

Typically _____________________ use the financial ratios to assess the risk of company before granting the loans.

a.

Accountant

b.

Shareholders

c.

None of these

d.

Credit managers

18)

As a general rule, the profitability, liquidity and asset management ratios should not be:

a.

None of these

b.

Higher

c.

Lower

d.

The same

19)

When using common size statements in intra-firm comparisons over different years and also in making inter-firm comparisons for the same year or for several years, this analysis is known as:

a.

Horizontal analysis

b.

Financial statement analysis

c.

Vertical analysis

d.

None of these

20)

One of the following statement is not a limitations of common-size statement:

a.

None of the these

b.

It fails to follow consistency

c.

It uses a standard ratio

d.

It fails to take into account the change in price-level

21)

The technique of studying the operational results and financial position over a series of years is called____________________.

a.

None of the these

b.

Market analysis

c.

Trend analysis

d.

Horizontal analysis

22)

Common-size statement does not spot the change during inflationary effect this could lead to:

a.

Misleading informations since it is based on historical cost.

b.

No change in the accuracy of the information

c.

All of these

d.

Seasonal fluctuations analysis being unreliable

23)

Salalah Company reported the sales over the last 4 years as follow: OMR 1,000 (2016), OMR 5,000 (2017), 2,000 OMR (2018) and OMR 9,000 (2019) respectively, then we can conclude that the companys sales have experienced:

a.

None of these

b.

Consistent decrease

c.

Fluctuations over the 4 years.

d.

Gradual increase

24)

A common size income statement is an income statement in which each line item is expressed as a percentage of the value of _________________.

a.

Revenues

b.

None of these

c.

Tax

d.

Profit

25)

As a financial analyst, when you analyze the liquidity of a company you should not depend mainly on common-size statement because:

a.

Cyclical fluctuations analysis being undependable

b.

The inaccuracy informations since it is based on historical cost.

c.

It does not help to determine the liquidity ratios.

d.

All of these