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US CMA Part 2 Financial Ratio Analysis — practice questions

Explore 23 free Financial Ratio Analysis questions in US CMA Part 2 Finance. Open each question or exercise to read its content, reference answers and available explanation.

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Financial Ratio Analysis questions and exercises with answers

Showing questions 1–23 of 23.

How many main types of financial ratios are named?Read the answer and worked solution →Which four main types of ratios are named?Read the answer and worked solution →Efficiency ratios are described as showing how well a company uses and manages its:Read the answer and worked solution →How a company uses and manages its assets is described as one key element of:Read the answer and worked solution →The current ratio represents current assets divided by:Read the answer and worked solution →The current ratio is described as closely related to:Read the answer and worked solution →Solvency is described as implying that a company can meet its obligations that are:Read the answer and worked solution →A solvent company is described as one that will likely:Read the answer and worked solution →Which four efficiency ratios are named for examination?Read the answer and worked solution →Which areas of efficiency are described as important?Read the answer and worked solution →Ratio analysis information can be used to examine trends in:Read the answer and worked solution →Alongside examining trends, ratio analysis can establish benchmarks for:Read the answer and worked solution →Ratio analysis is also described as being used to compare industry:Read the answer and worked solution →A company with current assets of 500 and current liabilities of 250 has a current ratio of:Read the answer and worked solution →A firm that can pay next month's bills but not its ten-year debt is strong in which respect only?Read the answer and worked solution →Inventory turnover and days' sales in inventory both belong to which ratio family?Read the answer and worked solution →A current ratio below one means current liabilities exceed:Read the answer and worked solution →Comparing a firm's ratios against rivals in the same sector uses which stated purpose of ratio analysis?Read the answer and worked solution →Build the working capital figureRead the answer and worked solution →Sort the ratio familiesRead the answer and worked solution →Judge the assertion and the reasonRead the answer and worked solution →Set the current ratioRead the answer and worked solution →Match each ratio familyRead the answer and worked solution →

Worked practice questions

How many main types of financial ratios are named?

  1. Four types
  2. Two types
  3. Six types
  4. Ten types
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Correct answer: A. Four types

1. Ratios are grouped into a small number of families. 2. Ratio analysis examines several aspects of financial health. 3. There are four main types of ratios. 4. They are liquidity, solvency, efficiency and profitability. _Source: OpenStax Principles of Finance (CC BY 4.0), Ch 6 'Measures of Financial Health'_

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Which four main types of ratios are named?

  1. Cash, accrual, hybrid, modified
  2. Liquidity, solvency, efficiency
  3. Debit, credit, ledger, journal
  4. Fixed, variable, mixed, step
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Correct answer: B. Liquidity, solvency, efficiency

1. The four families are listed together. 2. There are four main types of ratios. 3. They are liquidity, solvency and efficiency. 4. Profitability completes the list. _Source: OpenStax Principles of Finance (CC BY 4.0), Ch 6 'Measures of Financial Health'_

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Efficiency ratios are described as showing how well a company uses and manages its:

  1. Its assets
  2. Its auditors
  3. Advertising
  4. Applicants
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Correct answer: A. Its assets

1. Each ratio family answers one question. 2. Efficiency is one of the four main ratio types. 3. Efficiency ratios show how well a company uses and manages its assets. 4. That is described as one key element of financial health. _Source: OpenStax Principles of Finance (CC BY 4.0), Ch 6 'Measures of Financial Health'_

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