1Liquidity ratios measure the ability of an entity to:

remain a going concern.

meet its short-term obligations and unexpected cash needs.

generate profit.

all of the options are correct.

2

A high times debtors turnover indicates:

the entitys credit sales have decreased.

a small percentage of the entitys sales are on credit.

the entity is more efficient in collecting monies owing from customers.

customers are taking longer to pay their accounts.

3

Financial analysis can be categorised as:

vertical and horizontal analysis.

ratio analysis.

trend analysis.

all of the options listed.

4

Relying on absolute values in an entitys financial statements to predict future risks is not meaningful because:

an increase in the profit figure does not necessarily indicate an increase in the profitability of the entity.

an increase in non-current liabilities does not necessarily mean the entity has become more reliable on external funding.

an increase in current liabilities does not necessarily mean the entity is having liquidity problems.

all of the statements listed are correct.