QUESTION 1 Mimosa Ltd expects sales revenue of R20 000 and total current assets amounting to R5 000 for the coming year. The company also aims to achieve the following ratios: current ratio of 2,5:1; and acid test ratio of 2:1. Which one of the following alternatives represents a correct amount of inventory? A. R3 000 B. R6 000 C. R4 000 . D. R1 000 Reset Selection Question 2 of 4 1.5 Points QUESTION 2 What is the most used liquidity ratio that can be used to measure the proximity of cash position of a business? A. Quick ratio. B. Inventory turnover. C. Trade receivables collection period. . D. Current ratio. Reset Selection QUESTION 3 Jones Ltd has a debt-to-equity ratio of 25% compared with the industry average of 20%. This means that the Jones Ltd...... . A. will not experience any difficulty with its creditors when compared to other businesses. B. will be viewed as having high creditworthiness when compared to other businesses. . C. has greater than average financial risk when compared to other businesses. . D. has less liquidity than other businesses. Reset Selection QUESTION 4 Which one of the following statements is most likely to be correct? A. A capitalisation issue of shares using retained earings will improve the debt-equity ratio. . B. The acquisition of land and building through a mortgage will improve the debt-equity ratio. . C. An improvement of profit margin will improve the debt-equity ratio. . D. A lower debt-equity ratio lowers the protection of creditors. Reset Selection