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Ratio Analysis Class 10 Questions and Answers contains important questions taken from CBSE Board Papers. It covers key concepts related to ratio analysis and provides simple, clear, and exam-oriented answers. Practising these previous board questions helps Class 10 students revise important concepts, understand the question pattern, and prepare effectively for the examination.
Ratio Analysis Class 10 Questions and Answers
Q. _________ measures the profit available to the equity shareholders per share, that is, the amount that they can get on every share held. (CBSE 2025-26)
(A) Earning Per Share (EPS)
(B) Return on Equity
(C) Price to Earning Ratio (P/E Ratio)
(D) Net Profit Ratio
Answer: (A) Earnings Per Share (EPS)
Q. Which of the following is the formula of Debt-Equity ? (CBSE 2024-25)
(A) Total Debt/Total Equity
(B) Total Debt/Total Assets
(C) Net Sales/Net Fixed Assets
(D) Current Assets/Current Liability
Answer: (A) Total Debt / Total Equity
Q. Which of the following is not a profitability ratio ? (CBSE 2023-24)
(a) Gross Profit Ratio
(b) Net Profit Ratio
(c) Debt-Equity Ratio
(d) Return on Capital Ratio
Answer: (c) Debt-Equity Ratio
Q. “CRISIL is a credit rating agency in India”. Which of the following is not a credit rating agency in India : (CBSE 2022-23)
(a) CARE
(b) ICRA
(c) FITCH
(d) RBI
Answer: (d) RBI
Q. What is the formula of P/E Ratio ? (CBSE 2022-23)
(a) Market price of a share / Earning per share.
(b) Net profit / No. of outstanding share.
(c) Net profit after tax / Total capital employed.
(d) Net profit after tax / Net worth.
Answer: (a) Market Price of a Share / Earnings Per Share
Q. The long-term financial strength of a firm is assessed by its capacity to consistently pay interest and to repay principal amounts on specified due dates or at maturity. Identify such ratios and give two examples of these ratios. (CBSE 2025-26)
Answer: The long-term financial strength of a firm is judged by using Leverage/Capital Structure Ratios.
Two examples are:
- Debt-Equity Ratio
- Debt-Asset Ratio
Q. What do mean by Current Ratio ? Also write the formula of Current Ratio. (CBSE 2024-25)
Answer: Current Ratio measures the ability of a firm to meet its current liabilities from its current assets. Higher the current ratio, greater is the short-term solvency of the firm.
Formula:
- Current Ratio = Current Asssets / Current Liabilities
Q. Calculate the Inventory Turnover Ratio for the following information : (CBSE COMP 2024-25)
- Net sales ₹ 2,00,000
- Net Profit ₹ 50,000
- Opening Stock ₹ 1,00,000
- Closing Stock ₹ 50,000
Answer:
Given:
- Net Sales = ₹2,00,000
- Net Profit = ₹50,000
- Opening Stock = ₹1,00,000
- Closing Stock = ₹50,000
Formula:
- Inventory Turnover Ratio = Coast of Good Sold / Average Inventory
Cost of Goods Sold = Net Sales − Net Profit
- = 200000 – 50000
- = Rs. 150000
Average Inventory = (100000 + 50000) / 2
- = Rs. 75000
Inventory Turnover Ratio = 150000 / 75000
- = 2 times
Inventory Turnover Ratio = 2 times
Q. What are quick (Acid) Assets ? Write the formula of Acid-Test Ratio. (CBSE 2023-24)
Answer: Quick Assets are current assets excluding inventories and prepaid expenses.
Formula:
- Acid-Test Ratio = Quick Assets / Current Liabilities
Q. How can we find Market Capitalisation of a company ? (CBSE 2022-23)
Answer: Market Capitalisation is calculated by multiplying the current market price of a share by the number of shares issued by the company.
Formula:
- Market Capitalisation = Current Share Price x Number of Shares Issued
Q. Explain the Debt-Asset Ratio. (CBSE 2022-23)
Answer: Debt-Asset Ratio shows the proportion of a company’s assets financed through debt.
Formula:
- Debt-Asset Ratio = Total Debt / Total Assets
Where Total Debt includes long-term debt and current liabilities.
Q. Write the formula of Stock Turnover Ratio. (CBSE 2021-22)
Answer:
- Stock (Inventory) Turnover Ratio = Cost of Goods Sold / Average Inventory
Q. Long term solvency of a firm can be judged by using which ratios ? (CBSE 2021-22)
Answer: Long-term solvency of a firm can be judged by using Leverage/Capital Structure Ratios.
Examples:
- Debt-Equity Ratio
- Debt-Asset Ratio
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