Reading about a ratio is not the same as calculating one under exam conditions. These problems give you a new set of balances each time, ask you to work through the calculation one step at a time, and check each step as you go. When an answer is wrong, the hint names the mistake you most likely made.
They suit accounting and finance students, people preparing for professional exams, and anyone who wants to be sure they can read a balance sheet or income statement.
How the problems work
- Unsorted balances. As in an exam, the figures come as a list, including items that do not belong in the answer. Sorting them is part of the skill.
- One step at a time. Each problem splits the calculation into its steps: the totals first, then the ratio.
- Hints for the usual mistakes. Counting a long-term item as current, leaving out the current part of a loan or dividing the wrong way round each gets its own hint.
- The answer after two tries. If you are stuck on a step, you can reveal its answer and the working.
- Problem numbers. Every problem has a number, so a printed worksheet and its answer key always match.
Current ratio problems
Sort the balances into current and non-current, add up each side, then divide current assets by current liabilities. How the current ratio works.
Current ratio practice
Try a problem with fresh numbers
Work through each step and check it as you go. A wrong answer gets a hint; after two tries you can see the answer.
Quick ratio problems
Pick out the assets that are cash or close to it, leave inventory and prepaid expenses aside, then divide by current liabilities. How the quick ratio works.
Quick ratio practice
Try a problem with fresh numbers
Work through each step and check it as you go. A wrong answer gets a hint; after two tries you can see the answer.
Debt-to-equity problems
Add up everything the business owes and everything the owners have in it, then compare the two. How the debt-to-equity ratio works.
Debt-to-equity ratio practice
Try a problem with fresh numbers
Work through each step and check it as you go. A wrong answer gets a hint; after two tries you can see the answer.
Gross profit margin problems
Work from sales to net revenue to gross profit, then express gross profit as a share of net revenue. How gross profit margin works.
Gross profit margin practice
Try a problem with fresh numbers
Work through each step and check it as you go. A wrong answer gets a hint; after two tries you can see the answer.
Return on equity problems
Find net income, average the opening and closing equity, then divide. How return on equity works.
Return on equity practice
Try a problem with fresh numbers
Work through each step and check it as you go. A wrong answer gets a hint; after two tries you can see the answer.
Printable worksheets
Choose the ratios and how many problems you want, and print a worksheet with an answer key on a separate page. Every worksheet has new numbers. Ready-made PDFs are below the form.
Ready-made PDF worksheets
- Current ratio: 6 problems with answer key (PDF)
- Quick ratio: 6 problems with answer key (PDF)
- Debt-to-equity ratio: 6 problems with answer key (PDF)
- Gross profit margin: 6 problems with answer key (PDF)
- Return on equity: 6 problems with answer key (PDF)
- All five ratios: 10 problems with answer key (PDF)
Mistakes the problems test
- Treating long-term items as current. Equipment and loans due after more than a year stay out of current assets and current liabilities.
- Missing the current part of a loan. The part of a long-term loan due within the year is a current liability.
- Counting inventory in the quick ratio. The quick ratio leaves out inventory and prepaid expenses.
- Mixing up margin and markup. Gross margin divides gross profit by net revenue; dividing by cost gives the markup.
- Using ending balances where an average is asked for. Return on equity uses the average of opening and closing equity, because profit is earned over the whole year.
- Dividing the wrong way round. Each ratio has a fixed top and bottom; the inverse is a different measure.