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 alternatives represents amount of inventory? following correct a A. R4 000 . B. R6 000 C. R3 000 D. R1 000 Reset Selection QUESTION 2 What is the most used liquidity ratio that can be used to measure the proximity of cash position of a business? A. Trade receivables collection period. B. Inventory turnover. C. Quick ratio. 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 be viewed as having high creditworthiness when compared to other businesses. B. will not experience any difficulty with its creditors 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. The acquisition of land and building through a mortgage will improve the debt-equity ratio. B. A lower debt-equity ratio lowers the protection of creditors. . C. A capitalisation issue of shares using retained earnings will improve the debt-equity ratio. D. An improvement of profit margin will improve the debt-equity ratio. Reset Selection