PART II: TOTAL 20 MARKS (2 marks each). Answer the following multiple choice questions. 1. Efficiency ratios: A. Include the quick ratio, asset turnover ratio, and return on equity. B. Are used to measure how well the company uses its assets. C. Are used to measure how liquid the company is. D. Help answer questions of firm stability. E. None of the above. 2. The financial ratios of a firm can best be compared to: A. Ratios of firm in earlier years. B. Ratios of firms having the same capital structure. C. Ratios of firms in the same industry. D. All of the above. E. Only (A) and (C) of the above. 3. Which of the following is true for each category of financial ratios? A. Profitability ratios will be of interest to security market investors who want to know the return on their investment. B. Leverage ratios will be of interest to banks or other investors lending money to the firm. C. Liquidity ratios are of interest to creditors who prefer that a firm's current assets are well in excess of its current liabilities. D. Efficiency ratios might be of interest to stock market analysts who want to know how well the firm is being run. E. All of the above. 4. Market value is measured with reference to: A. Market capitalization. B. Market-to-Book (M/B) Ratio. C. Price-Earnings (P/E) Ratio. D. Enterprise Value. E. All of the above