Finance MCQs
Finance MCQs cover financial management, investment analysis, markets, and corporate finance. Ideal for MBA, CFA, and competitive exams like PPSC, FPSC, NTS, and SBP, they build concepts, analytical skills, speed, and accuracy through real-world scenarios.
Q: A company's ability to meet long-term obligations is assessed using
A) Profitability ratios
B) Liquidity ratios
C) Solvency ratios
D) Efficiency ratios
✅ Correct Answer: C
Explanation: Solvency ratios evaluate financial stability over the long term.
Q: A stock split results in
A) Decrease in total shares
B) More shares at lower price
C) Higher dividend per share
D) Increase in value per share
✅ Correct Answer: B
Explanation: A stock split increases the number of shares while reducing the per-share price proportionally.
Q: Market capitalization is calculated by
A) Sales × Assets
B) Earnings per share × Total shares
C) Price per share × Total shares
D) Net profit ÷ Total shares
✅ Correct Answer: C
Explanation: Market capitalization reflects the total market value of a company’s outstanding shares.
Q: Cash flow from operating activities includes
A) Depreciation
B) Loan proceeds
C) Sale of equipment
D) Interest income
✅ Correct Answer: D
Explanation: Interest income is typically part of cash from operating activities under standard accounting rules.
Q: The current ratio is calculated by
A) Net income ÷ Current assets
B) Fixed assets ÷ Current liabilities
C) Current assets ÷ Current liabilities
D) Revenue ÷ Current liabilities
✅ Correct Answer: C
Explanation: It indicates the ability to pay short-term obligations using current assets.