Efficiency Ratio Analysis Quiz by Shubhrata Shrestha | Aug 28, 2025 | 0 comments Efficiency Ratio Analysis Quiz 1. Stock turnover measures: A) How many times inventory is sold in a year B) How much profit is generated from stock C) How many suppliers a business pays in a year D) The average time debtors take to pay None 2. If a firm has very high debtor days (e.g., 90+ days), it is likely to face: A) Better liquidity B) Liquidity problems C) Higher profitability D) Stronger supplier trust None 3. The benchmark for debtor days is usually: A) 10–20 days B) 20–40 days C) 30–60 days D) 70–90 days None 4. A gearing ratio of 65% means: A) The firm is low geared B) The firm has no long-term liabilities C) The firm is highly geared D) The firm has no equity None 5. A firm taking 100 days to pay its suppliers would have: A) Very short creditor days B) Very long creditor days C) Ideal benchmark creditor days D) No creditors None 6. Which strategy can improve stock turnover? A) Increasing the range of products B) Holding lower stock levels C) Extending credit terms for customers D) Paying suppliers later None 7. Insolvency differs from bankruptcy because: A) Insolvency is legal, bankruptcy is financial B) Insolvency is financial distress, bankruptcy is legal declaration C) Both mean permanent closure D) Insolvency always leads to bankruptcy None 8. If Pharmacy A has debtor days of 15 and Pharmacy B has 73, which is more efficient? A) Pharmacy A B) Pharmacy B C) Both are equal D) Neither is efficient None 9. Which of the following is a limitation of reducing debtor days too much? A) It reduces cash inflow B) It may discourage customers C) It increases gearing D) It causes higher stock levels None 10. A gearing ratio below 50% generally indicates: A) High gearing and financial risk B) Low gearing and lower risk C) Insolvency D) Bankruptcy None Time's up Submit a Comment Cancel replyYour email address will not be published. Required fields are marked *Comment * Name * Email * Website Save my name, email, and website in this browser for the next time I comment. Δ
