Analysis of accounts: แบบฝึกหัด

Which of the following financial ratios is the most reliable measure of an enterprise's ability to pay its short-term debts immediately without relying on the sale of stock?

The financial accounts of a clothing manufacturer show that the Gross Profit Margin remained constant at \(40\%\) for two years, but the Profit Margin fell from \(20\%\) to \(12\%\). Which of the following is the most likely cause?

An enterprise currently has a current ratio of \(2.0:1\) and an acid test ratio of \(1.0:1\). If the enterprise purchases additional inventory on credit, what will be the immediate impact on these ratios?

When using financial ratios to compare the performance of two different enterprises in the same industry, which of the following represents a major limitation of the analysis?

The current ratio of a retail business has changed from \(2.4:1\) to \(1.5:1\) over the last year. What does this change most likely indicate?

Explain the importance of the Return on Capital Employed (ROCE) ratio to a potential investor interested in a new enterprise.

Evaluate the impact on an enterprise's liquidity if it decides to pay all of its Trade Payables immediately using its entire cash balance.

Analyze why an enterprise might experience a rising Gross Profit Margin while its Profit Margin is simultaneously falling.