Robert Half Assessment Test Robert Half Assessment Financial Analysis Questions and Answers

Question 1

What does a current ratio of less than 1.0 indicate about a company?

Accepted Answer

The company cannot cover its short-term liabilities with its current assets

Answer

A current ratio below 1.0 means the company's current liabilities exceed its current assets, signaling potential liquidity problems.

Question 2

Which financial statement shows a company's revenues and expenses over a specific period?

Accepted Answer

Income Statement

Answer

The income statement (also called a profit and loss statement) summarizes revenues, costs, and expenses to show net profit or loss.

Question 3

What does EBITDA stand for?

Accepted Answer

Earnings Before Interest, Taxes, Depreciation, and Amortization

Answer

EBITDA measures a company's core operational profitability by excluding non-operating and non-cash expenses.

Question 4

What does a negative free cash flow indicate?

Accepted Answer

The company is spending more cash than it generates from operations

Answer

Negative free cash flow means the company is consuming more cash than its operations produce, which may require financing.

Question 5

What is the debt-to-equity (D/E) ratio used to measure?

Accepted Answer

The proportion of financing that comes from creditors versus shareholders

Answer

The D/E ratio shows how leveraged a company is — a higher ratio indicates more reliance on debt financing.

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