Banking Awareness Questions Set 92 (Liquidity Metrics & Ratios – Finance)

 

 

Banking Awareness Questions for upcoming banks and insurance exams SBI PO, IBPS PO/Clerk, Federal Bank, RRB PO/Clerk, RBI, IPPB.

In accounting, liquidity (or accounting liquidity) is a measure of the ability of a debtor to pay their debts as and when they fall due. It is usually expressed as a ratio or a percentage of current liabilities. Liquidity is the ability to pay short-term obligations.

  1. What is the metric which defines operating liquidity available to business known as? [Asked in SBI PO Main 2017 Exam]
    A) Quick ratio
    B) Accounts payable turnover
    C) Working capital
    D) Cash conversion cycle
    View Answer
    Option C
    Some Extra:
    The liquidity metric Working capital is defined simply as the difference between two Balance sheet figures:

    Working capital = Current assets – Current liabilities
  2. What is the metric that measures the ability of a company to use its near cash or quick assets to extinguish or retire its current liabilities immediately known as?
    A) Acid test ratio
    B) Current ratio
    C) Overtrading
    D) Cash conversion cycle
    View Answer
    Option A
    Some Extra:
    In finance, the acid-test or quick ratio or liquidity ratio measures the ability of a company to use its near cash or quick assets to extinguish or retire its current liabilities immediately.

  3. What is the metric that measures whether or not a firm has enough resources to meet its short-term obligations known as?
    A) Acid test ratio
    B) Current ratio
    C) Overtrading
    D) Financial accounting
    View Answer
    Option B
    Some Extra:
    The current ratio is called “current” because, unlike some other liquidity ratios, it incorporates all current assets and liabilities.

    The current ratio is also known as the working capital ratio.
    Current Ratio = Current Assets / Current Liabilities
  4. What is the metric that measures how long a firm will be deprived of cash if it increases its investment in resources in order to expand customer sales known as?
    A) Quick ratio
    B) Accounts payable turnover
    C) Days payable outstanding
    D) Cash conversion cycle
    View Answer
    Option D
    Some Extra:
    In management accounting, the Cash conversion cycle (CCC) measures how long a firm will be deprived of cash if it increases its investment in resources in order to expand customer sales. It is thus a measure of the liquidity risk entailed by growth.
  5. What is the metric that measures the number of times that a firm pays off its suppliers during the accounting period known as?
    A) Accounts payable turnover
    B) Financial accounting
    C) Days payable outstanding
    D) Cash conversion cycle
    View Answer
    Option A
    Some Extra:
    The accounts payable turnover ratio is a short-term liquidity measure used to quantify the rate at which a company pays off its suppliers. Accounts payable turnover ratio is calculated by taking the total purchases made from suppliers, or cost of sales, and dividing it by the average accounts payable amount during the same period.
  6. What is the metric that measures the average number of days the company takes to payoff outstanding bills known as?
    A) Accounts payable turnover
    B) Financial accounting
    C) Days payable outstanding
    D) Quick ratio
    View Answer
    Option C
    Some Extra:
    Days payable outstanding (DPO) is an efficiency ratio that measures the average number of days a company takes to pay its suppliers.
  7. What is the metric that measures a company’s ability to meet its financial obligations known as?
    A) Market Ratio
    B) Debt Ratio
    C) Coverage Ratio
    D) Asset Coverage Ratio
    View Answer
    Option C
    Some Extra:
    The coverage ratio is a measure of a company’s ability to meet its financial obligations. In broad

    terms, the higher the coverage ratio, the better the ability of the enterprise to fulfill its obligations to its lenders.
  8. What is the test that determines a company’s ability to cover debt obligations with its assets after all liabilities have been satisfied known as?
    A) Key Ratio
    B) Debt Ratio
    C) Coverage Ratio
    D) Asset Coverage Ratio
    View Answer
    Option D
  9. What is the ratio that measures the extent of a company’s or consumer’s leverage known as?
    A) Key Ratio
    B) Debt Ratio
    C) Quick Ratio
    D) Leverage Ratio
    View Answer
    Option B
    Some Extra:
    It is a financial ratio that measures the extent of a company’s or consumer’s leverage. The debt ratio is defined as the ratio of total – long-term and short-term – debt to total assets, expressed as a decimal or percentage.
  10. What is the measurement that look at how much capital comes in the form of debt (loans), or assesses the ability of a company to meet financial obligations known as?
    A) Key Ratio
    B) Debt Ratio
    C) Quick Ratio
    D) Leverage Ratio
    View Answer
    Option D
    Some Extra:
    Leverage ratio in simple terms is the relation between the amount of equity that a company has and the amount of debt that it is carrying in its books. It is a measurement of the capacity of the company to meet its financial obligations.

Click here for topic wise Banking Awareness Questions

 

 

Related posts

42 Thoughts to “Banking Awareness Questions Set 92 (Liquidity Metrics & Ratios – Finance)”

  1. shivam

    Thanx a lot please mam 2 quizzes uspe bhi bnao like which institution under which act

    1. Ok. Sure.
      If you see any more topics left, do tell.

      1. shivam

        Yes mam I wl surely tell u
        But please make sure that all institutions should get covered thanks u people r doing great work

        1. Thankyou
          Yes, I will try that all get covered.

          1. Ravi yadav

            can u please upload the autonomous & important govt institutes in India before Ibps po mains exam

      2. ครђ

        @Shubhra_AspirantsZone:disqus Ma’am one set on Deficits (Fiscal Deficit , Budget Deficit and all ) please… :))

  2. Dipayan Nag

    thanks a lot AZ

  3. MERAKI

    Thanks a ton ma’am????

  4. Very nice post. I just stumbled upon your blog and wanted to say that I have truly enjoyed browsing your blog posts. In any case I?ll be subscribing to your rss feed and I hope you write again very soon!

  5. This is really interesting, You’re a very skilled
    blogger. I’ve joined your rss feed and look forward to seeking more of your magnificent post.
    Also, I have shared your site in my social networks!

  6. Hi colleagues, its enormous article concerning educationand completely defined,
    keep it up all the time.

  7. Great post however I was wanting to know if you could write
    a litte more on this topic? I’d be very thankful if you could elaborate a little bit more.
    Many thanks!

  8. Hi there, yup this paragraph is actually good and I have learned lot of things
    from it concerning blogging. thanks.

  9. Hi! I could have sworn I’ve visited this blog before but after looking at a few of the articles I realized it’s new to me. Regardless, I’m definitely happy I stumbled upon it and I’ll be book-marking it and checking back frequently!

  10. Hmm is anyone else encountering problems with the pictures on this blog loading?

    I’m trying to find out if its a problem on my
    end or if it’s the blog. Any responses would be greatly appreciated.

  11. Excellent blog you have here.. It’s difficult to find high-quality writing like yours nowadays. I really appreciate people like you! Take care!!

  12. Amazing things here. I’m very glad to see your post.
    Thanks so much and I’m having a look forward to contact you.
    Will you kindly drop me a mail?

  13. Do you mind if I quote a few of your articles as long as I provide credit
    and sources back to your weblog? My blog is in the very same niche as yours and
    my visitors would certainly benefit from a lot of the information you provide
    here. Please let me know if this alright with you.
    Many thanks!

  14. Your style is really unique in comparison to other
    folks I have read stuff from. I appreciate you for posting when you’ve got the opportunity, Guess I will just book mark this web site.

  15. I’ll immediately grasp your rss feed as I can’t to find
    your email subscription hyperlink or e-newsletter service.
    Do you’ve any? Please let me recognize so that I could
    subscribe. Thanks.

  16. Hello! I just wanted to ask if you ever have
    any issues with hackers? My last blog (wordpress) was hacked and I ended up losing many months of hard work
    due to no back up. Do you have any solutions to protect against hackers?

  17. No matter if some one searches for his essential thing, thus he/she desires
    to be available that in detail, so that thing is maintained over here.

  18. I am regular visitor, how are you everybody?
    This paragraph posted at this web page is genuinely pleasant.

  19. Now I am going to do my breakfast, after having my breakfast
    coming yet again to read more news.

  20. Hi there, this weekend is pleasant in favor of me, for the reason that this occasion i am reading this wonderful educational paragraph here at my
    residence.

  21. Greetings from California! I’m bored to tears at work so I
    decided to browse your website on my iphone during lunch
    break. I love the info you provide here and can’t wait to take a
    look when I get home. I’m amazed at how quick
    your blog loaded on my phone .. I’m not even using WIFI, just 3G ..
    Anyhow, good site!

  22. Hi there! Would you mind if I share your blog with my facebook
    group? There’s a lot of folks that I think would really
    enjoy your content. Please let me know. Many thanks

  23. I just couldn’t go away your web site before suggesting that I actually enjoyed the standard info an individual supply for your visitors?
    Is going to be again frequently to inspect new posts

  24. I seriously love your website.. Pleasant colors & theme.
    Did you make this amazing site yourself? Please reply back as I’m hoping to create my own website and
    want to learn where you got this from or what the theme is named.

    Thank you!

  25. Hi, I do believe this is a great website. I stumbledupon it 😉 I am going to return yet again since i have bookmarked it.
    Money and freedom is the best way to change, may you be rich and
    continue to guide other people.

  26. Do you have a spam problem on this website; I also am a blogger, and I
    was wanting to know your situation; we have created some nice practices and
    we are looking to exchange techniques with other folks, be sure to shoot me
    an email if interested.

  27. Asking questions are in fact pleasant thing if you
    are not understanding anything entirely, however this post presents fastidious understanding even.

  28. Do you mind if I quote a couple of your articles as long as I provide credit and sources back
    to your weblog? My blog is in the exact same niche as yours
    and my visitors would certainly benefit from a lot of the information you provide here.
    Please let me know if this okay with you.
    Thank you!

  29. Generally I do not read article on blogs, but I would like to say that this write-up very forced me to try and do it! Your writing style has been surprised me. Thanks, very nice post.

  30. No matter if some one searches for his vital thing, so he/she wants to be available that
    in detail, thus that thing is maintained over
    here.

  31. Thanks for every other informative site. Where else may I
    get that type of info written in such an ideal way?
    I’ve a mission that I am simply now running on, and I’ve been at the look out
    for such info.

  32. If you are going for best contents like I do, only go to
    see this site everyday because it provides feature contents, thanks

  33. Excellent web site. A lot of useful info here. I am sending
    it to several friends ans also sharing in delicious. And obviously, thank
    you in your sweat!

Comments are closed.