FIN2601 EXAM PACK QUEATION AND ANSWER UPDATE

FIN2601 EXAM PACK QUEATION AND ANSWER UPDATE


Sales - CoS = - ANSWER Gross profit Margin



What does EPS stand for? - ANSWER Earnings Per Share



Measures the percentage of each sales rand remaining after all costs and expenses, including (interest,
taxes and preference share dividends) have been deducted. What does this describe? - ANSWER Net
Profit Margin (NPM)



Profit for the year - Preference share dividend/ sales = - ANSWER Net Profit Margin (NPM)



What does TAT stand for? - ANSWER Total Asset Turnover



The ________________________ indicates the efficiency with which the firms uses its assets to
generate sales - ANSWER Total Asset Turnover



_________________ measures the overall effectiveness of management in generating profits with its
available assets - ANSWER Return on Assets



Current assets/current liabilities = - ANSWER Current ratio



Current assets = 1,223,000 Current liabilities = 620,000. What is the current ratio? - ANSWER 1.97



Which ratio measures the firms ability to meet its short term obligations? - ANSWER Current ratio



Current assets - Inventory/ Current Liabilities = - ANSWER Quick Ratio (AKA acid test)