AUD MCQ 4.5

Question 1

what ratios do an investor use or liquidity and financial flexibility

Answer 1

Balance sheet . Because liquidity ratios and coverage ratios focus on Balance sheet accounts

Question 2

Income statement is primarily used for

Answer 2

profitability analysis

Question 3

The statement of retained earnings is

Answer 3

Primirarly reconcialiation of retained earnings account

Question 4

The statement of cash flows assess

Answer 4

cash inflows and outflows

Question 5

Inventory turnover ratio

Answer 5

Cost of sales/Avg. Inventory. In order for the inventory turnover ratio to increase either cost of sales must increase or average inventory must decrease