WALL STREET PREP PREMIUM ACTUAL
TEST PAPER 2026 QUESTIONS WITH
SOLUTIONS GRADED A+
⩥ Profitability Ratios. Answer: measures of a firm's profitability relative
to its assets (operating efficiency) and to its revenue (operating
profitability)
⩥ Activity Ratios. Answer: Measure of efficiency of a firm's assets
⩥ Solvency Ratios. Answer: Measure of a firm's ability to pay its
obligations
⩥ Inventory Turnover. Answer: COGS / avg inventory
⩥ Receivables Turnover. Answer: revenue / average accounts receivable
⩥ DSO (Days Sales Outstanding). Answer: AR/Credit Sales * days in
period
days in period/receivables turnover
⩥ A/P turnover. Answer: COGS / Average A/P
,⩥ PPP (payables purchasing period). Answer: days in period/ Accounts
payable turnover
⩥ Current Ratio. Answer: current assets/current liabilities
⩥ Quick ratio (acid test). Answer: Cash and AR divided by current
liabilities
⩥ Gross profit margin. Answer: gross profit/revenue
⩥ operating margin. Answer: operating profit/revenue
⩥ net profit margin. Answer: net income/revenue
⩥ asset turnover. Answer: revenue/ average assets
⩥ return on assets (ROA). Answer: Net Income / Average Assets
⩥ return on equity (ROE). Answer: net income/ total equity
⩥ Basic EPS. Answer: (Net Income - Preferred Dividends)/(Weighted
Average of Shares Outstanding)
, ⩥ Diluted EPS. Answer: diluted net income / weighted average diluted
shares outstanding
⩥ dividend yield. Answer: dividends/net income
⩥ debt to EBITDA. Answer: Total Debt/EBITDA
⩥ interest coverage ratio. Answer: EBIT/ interest expense
⩥ fixed charge coverage. Answer: (EBIT + Lease charges)/(Interest
Payments + Lease charges)
⩥ Debt to Total Assets. Answer: Total Debt/Total Assets
⩥ debt to equity. Answer: total liabilities/total equity
⩥ cash from operations (CFO). Answer: uses net income as a starting
point and converts accrual base net income into cash flow from
operations via a series of adjustments
⩥ cash from investing activities (CFI). Answer: capital expenditures /
asset sales and purchases
TEST PAPER 2026 QUESTIONS WITH
SOLUTIONS GRADED A+
⩥ Profitability Ratios. Answer: measures of a firm's profitability relative
to its assets (operating efficiency) and to its revenue (operating
profitability)
⩥ Activity Ratios. Answer: Measure of efficiency of a firm's assets
⩥ Solvency Ratios. Answer: Measure of a firm's ability to pay its
obligations
⩥ Inventory Turnover. Answer: COGS / avg inventory
⩥ Receivables Turnover. Answer: revenue / average accounts receivable
⩥ DSO (Days Sales Outstanding). Answer: AR/Credit Sales * days in
period
days in period/receivables turnover
⩥ A/P turnover. Answer: COGS / Average A/P
,⩥ PPP (payables purchasing period). Answer: days in period/ Accounts
payable turnover
⩥ Current Ratio. Answer: current assets/current liabilities
⩥ Quick ratio (acid test). Answer: Cash and AR divided by current
liabilities
⩥ Gross profit margin. Answer: gross profit/revenue
⩥ operating margin. Answer: operating profit/revenue
⩥ net profit margin. Answer: net income/revenue
⩥ asset turnover. Answer: revenue/ average assets
⩥ return on assets (ROA). Answer: Net Income / Average Assets
⩥ return on equity (ROE). Answer: net income/ total equity
⩥ Basic EPS. Answer: (Net Income - Preferred Dividends)/(Weighted
Average of Shares Outstanding)
, ⩥ Diluted EPS. Answer: diluted net income / weighted average diluted
shares outstanding
⩥ dividend yield. Answer: dividends/net income
⩥ debt to EBITDA. Answer: Total Debt/EBITDA
⩥ interest coverage ratio. Answer: EBIT/ interest expense
⩥ fixed charge coverage. Answer: (EBIT + Lease charges)/(Interest
Payments + Lease charges)
⩥ Debt to Total Assets. Answer: Total Debt/Total Assets
⩥ debt to equity. Answer: total liabilities/total equity
⩥ cash from operations (CFO). Answer: uses net income as a starting
point and converts accrual base net income into cash flow from
operations via a series of adjustments
⩥ cash from investing activities (CFI). Answer: capital expenditures /
asset sales and purchases
