Question 12

A companys gearing ratio (Debt/Equity) is 60%. This would rise if

Group of answer choices

The increase in shareholders equity is equal in amount to decrease in long term loans

The decrease in shareholders equity is equal in amount to decrease in long term loans

The part of long term loans are repaid

Right issue of shares of 1 for 5 is made

Question 13

CAD CAD

Sales 450,000

Opening inventory 40,000

Purchases 260,500

300,500

Less: closing inventory (60,000) (240,500)

Gross profit 209,500

Its rate of inventory turnover for the year is?

Group of answer choices

4.9 times

5.3 times

7.5 times

9 times

Question 14

Tara Ltd produces a single product with a margin on sales of 25%.

Total sales for the year CAD 400,000

Receivables collection period 64 days

Average receivables CAD 32,000

The value of inventory held during the year was constant. The cost of credit sales was?

Group of answer choices

CAD 136,875

CAD 182,500

CAD 192,000

CAD 197,325

Question 15

The following are extracts from the financial statements of Laiba Ltd for the year ended 31 December 2018.

Statement of financial position Statement of Comprehensive Income

CAD 000 CAD 000

Issued share capital 3,600 Operating profit 1,431

Reserves 1,800 Debenture interest (216)

5,400 1,215

12% debenture 2018 1,800

7,200

What is the return (%) on long-term funds?

Group of answer choices

19.88%

16.88%

22.50%

26.50%

Question 16

The opening inventory for a business was CAD 108,000. The closing inventory was CAD 144,000. Inventory turnover for the year was 10 times.

The gross margin was 30%.

What were the sales for the year?

Group of answer choices

CAD 1,800,000

CAD 1,260,000

CAD 1,200,000

CAD 1860,000

Question 17

Adeel Limited has trade payables (creditors) of CAD 12,000 and a bank overdraft of CAD 3,000. Its current ratio is 2.5: 1 and its quick (acid test) ratio is 1.5:1.

What is the value of its inventory (stock)?

Group of answer choices

CAD 15,000

CAD 12,500

CAD 22,500

CAD 37,500

Question 18

Extracts from statement of financial position of Turab Limited at 31 March 2019 are presented below:

CAD 000

Loans due in more than one year 32

5% loan notes 24

Ordinary shares - CAD 1 each fully paid 80

6% redeemable preferred shares, CAD 1 each fully paid 16

Retained profits 104

Revaluation reserve 40

The gearing ratio is (to one decimal place)?

Group of answer choices

24.3%

25.0%

35.3%

39.1%

Question 19

Liquid ratio is also known as

1. Quick ratio
2. Acid test ratio
3. Working capital ratio
4. Stock turnover ratio

Group of answer choices

1 and 2

1 and 3

2 and 4

3 and 4

Question 20

Care pharmacy Ltd. has a current ratio equal to 1.6 and a quick ratio equal to 1.2. The company has CAD200 million in sales and its current liabilities are CAD10 million. what is the value of

company's current assets?

Group of answer choices

CAD16 million

CAD 14 million

CAD 18 million

CAD 20 million

Question 21

Determine working capital turnover ratio if, current assets is CAD150 million, current liabilities is CAD100 million and Sales during the year are CAD500 million.

Group of answer choices

10 times

5 times

15 times

20 times

Question 22

A debtor turnover ratio of 12 times means that:

Group of answer choices

the average debtor takes about one month to pay.

one-twelfth of debtors will turn out to be bad debts

debtors are about twelve times as big as creditors

in any given month, twelve debtors are expected to pay in full

Question 23

What is the impact of collection of debtors on the current ratio;

Group of answer choices

No Impact

Increase

Decrease

None of the above

Question 24

Which of the following is not included in the computation of acid test ratio?

Group of answer choices

Stock

Short-term investments

Cash at bank

Debtors

25.

Determine inventory turnover ratio if, opening inventory is CAD31 million, closing inventory is CAD29 million, sales are CAD320 million and gross profit margin is 25%.

Group of answer choices

8 times

6 times

11 times

16 times