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Cambridge IGCSE Accounting practice

Paper 2 structured question: Calculation and understanding of accounting ratios

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Calculation and understanding of accounting ratios

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Paper 2Structured Written Paper3 marks

A business has a trade receivables turnover of 30 days and a trade payables turnover of 45 days.

Description

Business Turnover Ratios

The business is analyzing its efficiency in managing receivables and payables.

  1. a

    Discuss the implications of having a trade receivables turnover of 30 days and a trade payables turnover of 45 days.

    Aim for approximately 3 distinct marking points.

    [3]

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Paper 2 structured question: Calculation and understanding of accounting ratios

Paper 2Structured Written Paper4 marks

Data Table

Company Financial Data

DescriptionValue
Revenue$500,000
Cost of Goods Sold$300,000
Net Profit$50,000
Current Assets$200,000
Current Liabilities$100,000
Inventory$50,000
  1. a

    Calculate the Gross Margin ratio.

    Aim for approximately 2 distinct marking points.

    [2]
  2. b

    Calculate the Current Ratio.

    Aim for approximately 2 distinct marking points.

    [2]