Fundamental Analysis Basics MCQs September 11, 2025 by u930973931_answers Score: 0 Attempted: 0/50 Subscribe 1. Fundamental analysis mainly studies: (A) Price charts and volumes (B) Company’s financial and economic data (C) Market rumors (D) Technical indicators 2. Which is a primary tool of fundamental analysis? (A) Balance Sheet (B) Candlestick chart (C) RSI (D) MACD 3. Earnings Per Share (EPS) is calculated as: (A) Net Income ÷ Number of Outstanding Shares (B) Revenue ÷ Assets (C) Dividends ÷ Liabilities (D) Profit ÷ Total Capital 4. Price-to-Earnings (P/E) ratio is used to measure: (A) Company valuation (B) Tax rate (C) Dividend payout (D) Cash reserves 5. High P/E ratio usually indicates: (A) Company is undervalued (B) Company is overvalued or growth expected (C) Company has no profits (D) Market crash 6. Dividend Yield is calculated as: (A) Dividend ÷ Market Price per Share × 100 (B) Dividend ÷ EPS × 100 (C) Dividend ÷ Revenue × 100 (D) Dividend ÷ Assets × 100 7. Book Value represents: (A) Net worth of company per share (B) Market price of shares (C) Dividend per share (D) Cash in hand 8. Market Capitalization is: (A) Current share price × Outstanding shares (B) Total revenue × Profit (C) Dividend × EPS (D) Assets ÷ Liabilities 9. Which analysis focuses on GDP, inflation, and interest rates? (A) Microeconomic (B) Macroeconomic (C) Technical (D) Chart analysis 10. Which ratio shows company’s ability to meet short-term liabilities? (A) Current Ratio (B) Debt-to-Equity Ratio (C) P/E Ratio (D) Dividend Yield 11. Quick Ratio excludes: (A) Cash (B) Marketable securities (C) Inventory (D) Accounts receivable 12. Debt-to-Equity ratio shows: (A) Company liquidity (B) Company leverage (C) Dividend policy (D) Market value 13. Return on Equity (ROE) measures: (A) Profitability for shareholders (B) Liquidity position (C) Dividend strength (D) Asset utilization 14. Return on Assets (ROA) measures: (A) Net income ÷ Total assets (B) Net income ÷ Equity (C) Profit ÷ Market cap (D) Dividend ÷ EPS 15. Fundamental analysis helps in: (A) Short-term price prediction (B) Long-term investment decisions (C) Chart analysis (D) Technical trading 16. Which report is most important in fundamental analysis? (A) Annual Report (B) Candlestick pattern (C) Moving Average (D) MACD signal 17. Which is NOT a fundamental factor? (A) Revenue growth (B) Market trend line (C) Profit margins (D) Debt level 18. Price-to-Book (P/B) ratio compares: (A) Market value vs book value (B) EPS vs dividend (C) Assets vs liabilities (D) Cash vs equity 19. A low P/B ratio often indicates: (A) Overvalued company (B) Undervalued company (C) Neutral valuation (D) High profits 20. PEG ratio stands for: (A) Price/Earnings to Growth (B) Profit/Earnings Gap (C) Price Equity Growth (D) Profit Evaluation Guide 21. A company’s intrinsic value is estimated by: (A) Fundamental analysis (B) Technical analysis (C) Chart patterns (D) Market rumors 22. Higher debt-to-equity ratio means: (A) Lower financial risk (B) Higher financial risk (C) No impact on company (D) Higher dividend yield 23. Which is considered profitability ratio? (A) Gross Margin (B) Current Ratio (C) Debt Ratio (D) Interest Coverage 24. Operating Margin is calculated as: (A) Operating Income ÷ Sales × 100 (B) Net Profit ÷ Assets × 100 (C) Dividend ÷ EPS × 100 (D) Cash ÷ Liabilities × 100 25. Net Profit Margin shows: (A) Net profit ÷ Revenue × 100 (B) Net profit ÷ Equity × 100 (C) Net profit ÷ Assets × 100 (D) Net profit ÷ Dividend × 100 26. Which ratio is used to measure solvency? (A) Debt-to-Equity Ratio (B) EPS (C) P/E Ratio (D) Dividend Yield 27. Free Cash Flow means: (A) Cash after expenses and capital expenditures (B) Dividend payments (C) Total profit (D) Cash in bank only 28. Fundamental analysts consider industry analysis to: (A) Compare companies in same sector (B) Identify daily trends (C) Create chart patterns (D) Avoid financial ratios 29. Which is NOT a type of financial statement? (A) Balance Sheet (B) Income Statement (C) Cash Flow Statement (D) Trendline Chart 30. A company’s revenue minus cost of goods sold is: (A) Gross Profit (B) Net Profit (C) Operating Profit (D) Dividend 31. Net income after all expenses is: (A) Operating profit (B) Net profit (C) Gross profit (D) EBIT 32. Which factor is external in fundamental analysis? (A) Company earnings (B) Government policies (C) Management efficiency (D) Dividend decisions 33. Which ratio shows how efficiently assets are used? (A) Asset Turnover Ratio (B) Current Ratio (C) EPS (D) Debt-to-Equity 34. Which analysis studies company management and policies? (A) Qualitative analysis (B) Quantitative analysis (C) Technical analysis (D) None of these 35. Which is NOT considered in qualitative analysis? (A) Brand value (B) Management competence (C) Dividend yield (D) Business strategy 36. Which method discounts future cash flows to value a company? (A) DCF (Discounted Cash Flow) (B) RSI (C) Technical Oscillator (D) MACD 37. Fundamental analysis is less useful for: (A) Short-term trading (B) Long-term investing (C) Company valuation (D) Industry comparison 38. Which factor affects company’s future growth potential? (A) Market demand (B) Industry competition (C) Economic policies (D) All of the above 39. Which is a limitation of fundamental analysis? (A) Time consuming (B) May not predict short-term prices (C) Relies on assumptions (D) All of the above 40. Fundamental analysis considers: (A) Economic factors (B) Industry factors (C) Company factors (D) All of the above 41. Earnings growth is important because: (A) It drives stock price appreciation (B) It lowers dividends (C) It reduces assets (D) It reduces valuation 42. Which ratio is used to evaluate dividend policy? (A) Dividend Payout Ratio (B) P/E Ratio (C) Current Ratio (D) Debt Ratio 43. Dividend Payout Ratio is calculated as: (A) Dividend ÷ Net Income × 100 (B) Dividend ÷ EPS × 100 (C) Dividend ÷ Assets × 100 (D) Dividend ÷ Sales × 100 44. A high Dividend Payout Ratio indicates: (A) Company reinvests less in growth (B) Company is expanding fast (C) Company has no profit (D) Company is undervalued 45. Interest Coverage Ratio measures: (A) Ability to pay interest (B) Dividend capacity (C) Tax payment ability (D) Asset utilization 46. Which of these is a liquidity ratio? (A) Current Ratio (B) Quick Ratio (C) Cash Ratio (D) All of the above 47. Which of the following is an efficiency ratio? (A) Inventory Turnover (B) Debt Ratio (C) Dividend Yield (D) P/B Ratio 48. Fundamental analysis is also known as: (A) Intrinsic value analysis (B) Price action study (C) Chart pattern study (D) Technical timing 49. Which of the following is most useful for value investors? (A) Fundamental analysis (B) Technical analysis (C) Chart trading (D) Oscillators 50. Fundamental analysis is based on the belief that: (A) True value of stock can be determined (B) Charts predict everything (C) Market is always irrational (D) Intraday moves matter more