- Which financial performance metric measures the efficiency of a company in generating profit from its sales?A) Return on Assets (ROA)B) Gross Profit Margin
C) Days Sales Outstanding (DSO)
D) Inventory Turnover Ratio
Answer: B) Gross Profit Margin
- What does ‘Return on Investment’ (ROI) indicate in the context of supply chain management?A) The total revenue generated from supply chain operationsB) The profitability of an investment relative to its cost
C) The speed of inventory turnover
D) The efficiency of production processes
Answer: B) The profitability of an investment relative to its cost
- Which metric is used to assess how well a company manages its inventory levels relative to its sales?A) Inventory Turnover RatioB) Cash Conversion Cycle (CCC)
C) Days Inventory Outstanding (DIO)
D) Return on Equity (ROE)
Answer: A) Inventory Turnover Ratio
- What is ‘Return on Assets’ (ROA) and why is it important in supply chain management?A) A measure of profitability that indicates how efficiently a company uses its assets to generate profitB) The total cost of supply chain operations
C) The speed of order fulfillment
D) The total amount of assets held by the company
Answer: A) A measure of profitability that indicates how efficiently a company uses its assets to generate profit
- How does ‘Cash Conversion Cycle’ (CCC) impact a company’s financial performance?A) It measures the time taken to convert investments into profitB) It indicates how quickly a company can convert inventory and receivables into cash while managing payables
C) It evaluates the efficiency of marketing campaigns
D) It assesses the return on long-term investments
Answer: B) It indicates how quickly a company can convert inventory and receivables into cash while managing payables
- What does the ‘Current Ratio’ measure, and why is it significant?A) The ratio of current assets to current liabilities, indicating a company’s ability to cover short-term obligations with its short-term assetsB) The ratio of long-term debt to equity
C) The efficiency of converting receivables into cash
D) The proportion of fixed assets to total assets
Answer: A) The ratio of current assets to current liabilities, indicating a company’s ability to cover short-term obligations with its short-term assets
- Which metric measures how effectively a company controls its operational costs relative to its revenue?A) Operating Profit MarginB) Days Sales Outstanding (DSO)
C) Return on Equity (ROE)
D) Debt-to-Equity Ratio
Answer: A) Operating Profit Margin
- What is the purpose of ‘Days Sales Outstanding’ (DSO) in financial performance assessment?A) To measure the average number of days it takes to collect payment from customersB) To determine the average time taken to pay suppliers
C) To evaluate inventory turnover efficiency
D) To assess the overall profitability of the company
Answer: A) To measure the average number of days it takes to collect payment from customers
- Which metric is used to evaluate a company’s leverage and financial risk?A) Debt-to-Equity RatioB) Inventory Turnover Ratio
C) Gross Profit Margin
D) Return on Assets (ROA)
Answer: A) Debt-to-Equity Ratio
- What does ‘Return on Equity’ (ROE) measure in the context of financial performance?A) The profitability of the company relative to shareholders’ equityB) The efficiency of inventory management
C) The company’s ability to meet its short-term obligations
D) The total amount of assets used in operations
Answer: A) The profitability of the company relative to shareholders’ equity