( Best 100+ )MANAGENT ACCOUNTING Question And Answers

by Mr. DJ

MANAGENT ACCOUNTING Question And Answers

  1. Give the formula for average payment period.

Answer:- Average payment period = Average Trade Creditors / Net Credit Purchases X 100

  1. Give the formula for inventory conversion period.

Answer:- Inventory conversion period = 365 / Inventory Turnover Ratio

  1. Give the formula for working capital.

Answer:- Working capital = current assets – current liabilities

  1. Give the formula for debt –equity ratio.

Answer:- Debt –equity ratio= Total Long Term Debts / Shareholders Fund

  1. Give the formula for proprietary ratio.

Answer:- Proprietary ratio = Shareholders Fund/ Total Assets

  1. Give the formula for solvency ratio.

Answer:- Solvency ratio = Total liabilities to outsiders / total assets

  1. Give the formula for interest coverage ratio.

Answer:- Interest coverage ratio = EBIT / Interest expenses

  1. Give the rule of thumb for liquidity ratios.

Answer:- Current ratio =2:1, liquid ratio =1:1, absolute liquid ratio = 0.5:1.

  1. What is EPS?

Answer:- EPS= Net profit/ no of equity shares

  1. What is included in shareholder’s funds?

Answer:- Shareholders’ funds include equity share capital, preference share capital, retained earnings.

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