EXAM CODE $03$

In order to assess a company's ability to fulfill its long$-$term obligations. an analyst would most likely examine

A$.$ activity ratios

B$.$ liquidity ratios

C$.$ Solvency ratios

D$.$ profitability ratios

$8.$ The following is the distress level of some selected companies listed on the Ghana Stock Exchange from $2010$ to $2017.$

$\backslash$table$[[$DISTRESS$,2010,2011,2012,2013,2014,2015,2016,2017],[$ACCESS BANK,$22\mathrm{.}03975,13\mathrm{.}70738,2\mathrm{.}190784,1\mathrm{.}268356,0\mathrm{.}877963,0\mathrm{.}709462,0\mathrm{.}938709,1\mathrm{.}161573],[$UT BANK,$0\mathrm{.}395043,0\mathrm{.}383135,0\mathrm{.}425489,0\mathrm{.}373931,0\mathrm{.}370356,,,],[$STNDAPD CHARTERED BANK,$4\mathrm{.}703049,-3\mathrm{.}96321,0\mathrm{.}920578,1\mathrm{.}525401,1\mathrm{.}653328,1\mathrm{.}361095,1\mathrm{.}187081,1\mathrm{.}551248],[$GCB BANK,$1\mathrm{.}241597,0\mathrm{.}752647,0\mathrm{.}915483,1\mathrm{.}256309,1\mathrm{.}34298,1\mathrm{.}488055,1\mathrm{.}401802,0\mathrm{.}789194],[$ECOBANK$,0\mathrm{.}046588,0\mathrm{.}035008,0\mathrm{.}088209,0\mathrm{.}204224,0\mathrm{.}254342,0\mathrm{.}2954,4\mathrm{.}618565,0\mathrm{.}249384],[$UNILEVER$,2\mathrm{.}241074,1\mathrm{.}945167,2\mathrm{.}16524,2\mathrm{.}146572,1\mathrm{.}993897,1\mathrm{.}952028,1\mathrm{.}845638,1\mathrm{.}890539],[$TOTALGHANA$,17\mathrm{.}54263,24\mathrm{.}42086,23\mathrm{.}57647,7\mathrm{.}759464,8\mathrm{.}317315,7\mathrm{.}439658,4\mathrm{.}694619,3\mathrm{.}824044],[$FANNILKGHANA$,60\mathrm{.}25763,13\mathrm{.}08802,10\mathrm{.}65685,22\mathrm{.}03675,11\mathrm{.}54736,8\mathrm{.}93484,10\mathrm{.}99092,13\mathrm{.}32165],[$ANGLOGOLD ASHANT,$2\mathrm{.}484576,3\mathrm{.}020287,1\mathrm{.}743247,1\mathrm{.}378638,0\mathrm{.}401139,0\mathrm{.}197694,0\mathrm{.}435857,0\mathrm{.}287839],[$AFRICANCHAMPIONINDUSTRIES$,0\mathrm{.}458694,-0\mathrm{.}29912,-1\mathrm{.}88044,-5\mathrm{.}68162,-36\mathrm{.}157,-2\mathrm{.}52299,-2\mathrm{.}87568,-0\mathrm{.}500009]]$

How would you describe UT Bank from $2010$ to $2014?$

A$.$ Non$-$distress company

B$.$ Distress company

C$.$ Grey company

D$.$ Listed company

$9.$ An analyst observes the following data for two companies:

$\backslash$table$[[,$Company A$,$Company B$],[$Revenue$,4,500,6,000],[$Net income,$50,1,000],[$Current assets,$40,000,60,000],[$Total assets,$100,000,700,000],[$Current liabilities,$10,000,50,000],[$Total debts,$60,000,150,000],[$Shareholders equity,$30,000,500,000]]$

Which of the following choices best describes reasonable conclusions that the analyst might make about the two companies' ability to pay their current and long$-$term obligations?

A$.$ Company A$\text{'}$s current ratio of $4\mathrm{.}0$ indicates it is more liquid than Company $B,$ whose current ratio is only $1\mathrm{.}2,$ but Company $B$ is more solvent, as indicated by its lower debt$-$to$-$equity ratio.