Important Ratios in Financial Forecasting

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

Financial ratios often do not mean anything by themselves. In order for a financial ratio to provide meaning, what must it be compared to?

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1. What type of ratio is return on equity (ROE)?

2. If a company has average net assets of $4.5M, average stockholder equity of $3.5M, net income of $465,000, and an EPS of $2.88, what is the organization's ROA?

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About This Quiz & Worksheet

The quiz and worksheet are tools that aid in checking your knowledge of ratios used in financial forecasting. Different types of financial ratios are on the quiz.

Quiz & Worksheet Goals

These resources help test your knowledge of:

  • ROA of an organization
  • Another term for debt in accounting
  • Type of ratio that an ROE is
  • How financial ratios can provide meaning

Skills Practiced

  • Reading comprehension - ensure that you pick out the most important pieces of information from the business lesson on financial forecasting
  • Information recall - access the knowledge you have acquired about another term for debt
  • Knowledge application - use your knowledge to answer a question about what type of ratio an ROE is

Additional Learning

Keep learning about these financial topics using the lesson called Important Ratios in Financial Forecasting. This lesson was designed to help you learn more about:

  • Uses for financial ratios
  • Examples of different types of ratios
  • Using the P/E ratio
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