Practice Exam
Certificate in Financial Ratios

Certificate in Financial Ratios

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Financial Ratios

Financial ratios give business owners a means to assess their company's performance and contrast it with that of other companies in the same sector. Ratios assess the connection between two or more financial statement elements. When data from many time periods are compared, they are most useful.

There are several standard ratios that are frequently used in accounting to assess the overall financial health of a firm or other entity.

Who should take the Financial Ratios Exam?

  • Finance managers, senior executives, executives
  • Anyone looking for finance jobs.
  • Student pursuing courses like CA, CFA,CPA, ACCA, CIMA, MBA Finance or Finance Graduate 
  • Investment Professional /Banker
  • Small and medium business owner
  • Startup founder or retail investor

Skills Required

  • Basic Accounting Knowledge
  • Mathematical & Analytical Skills
  • Understanding of Financial Ratios
  • Financial Statement Analysis
  • Critical Thinking & Business Judgment

Financial Ratios Certification Course Outline

  • Activity Ratios
  • Debtors Turnover ratio
  • Days Sales outstanding
  • Inventory Turnover ratio
  • Days inventory on hand
  • Payable Turnover ratio
  • Days payable outstanding
  • Working Capital Turnover ratio
  • Total assets Turnover ratio
  • Fixed assets Turnover ratio
  • Liquidity Ratios
  • Current ratio
  • Quick ratio
  • Cash ratio
  • Defensive Interval ratio
  • Cash conversion cycle
  • Solvency Ratios
  • Debt to capital ratio
  • Debt to asset ratio
  • Debt to Equity ratio
  • Capital gearing ratio
  • Financial Leverage ratio
  • Interest coverage ratio
  • Profitability Ratios
  • Gross profit margin
  • Operating profit margin
  • Pretax profit margin
  • Net profit margin
  • Return on assets
  • Return on capital
  • Return on Equity
  • Valuation or Market price Ratios
  • Earnings per share
  • Price to earnings ratio
  • Price to earnings growth ratio
  • Payout Ratio
  • Dividend Yield
  • Price to Cash flow ratio
  • Price-to-sales ratio

 

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Certificate in Financial Ratios FAQs

The exam typically includes multiple-choice questions, calculation-based problems, short-answer interpretations, and occasionally, case-study or scenario-based analysis questions.

Candidates should have a solid understanding of the balance sheet, income statement, and cash flow statement, as most ratios are derived from these documents.

This depends on the exam body or institution. Some may allow basic financial calculators or spreadsheet tools for computation, while others may conduct the exam in a strictly manual format.

Yes, memorizing key formulas is essential, as the exam often requires quick and accurate calculations without formula reference sheets.

Grading is based on accuracy of calculations, correctness of interpretation, clarity of analysis, and sometimes, the logical structuring of written responses in applied questions.

Preparation time varies by individual background but generally ranges from 3 to 5 weeks of consistent study, including practice exercises and past exam papers.

While not required, prior exposure to basic accounting and financial statement analysis will significantly enhance comprehension and performance.

Yes, many institutions offer an online proctored version of the exam, particularly in professional certification or remote learning programs.

Recommended resources include textbooks on financial analysis, online video tutorials, practice question banks, and access to financial reports of real companies for practical analysis.

The exam focuses on assessing a candidate's ability to calculate, interpret, and apply key financial ratios to analyze the performance, liquidity, solvency, and efficiency of businesses.