1. You have been approached by a company director who wants to have a better understanding of the liquidity position of their business. They provide you with the following information: - Property, plant and equipment = CU40,000 - Inventory = CU30,000 - Receivables = CU20,000 - Cash = CU5,000 - Payables = 15,000 - Long-term loans = 25,000 Calculate the cash ratio.

A)The cash ratio is 0.2

B)The cash ratio is 0.33

C)The cash ratio is 1.67

D)The cash ratio is 3.0

2.

Who is the legal owner of a company's assets?

A)Shareholders

B)The company

C)The State

D)Management

3. Which of the following is not a principal use of free cash?

A)Purchase of inventory

B)Share buybacks

C)Reducing debt

D)Pay dividends

4. Prior to the revision of lessee accounting there were two lease classifications; namely operating and finance leases. Which of these are associated with off balance sheet finance?

A)Operating leases only

B)Finance leases only

C) Both operating and finance leases

D)Neither were considered off-balance sheet items

5. Based on the following information calculate the working capital asset turnover. - Inventory = CU10,000 - Trade receivables = CU4,000 - Trade payables = CU5,000 - Sales = CU25,000

A)The working capital asset turnover is 1.3

B)The working capital asset turnover is 1.8

C)The working capital asset turnover is 2.3

D)The working capital asset turnover is 2.8