Ratio Showdown (ACCA FA)

Exercise and reference answers

Questions

1. A

   Current ratio 2.0

   B

   Quick ratio 1.2

   Higher value

   Current ratio 2.0

2. A

   Receivables days 45

   B

   Payables days 30

   Higher value

   Receivables days 45

3. A

   Gearing 60%

   B

   Gearing 35%

   Higher value

   Gearing 60%

4. A

   Inventory days 50

   B

   Inventory days 28

   Higher value

   Inventory days 50

5. A

   ROCE 15%

   B

   ROCE 9%

   Higher value

   ROCE 15%

Instructions

Tap the larger figure.