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Cambridge IGCSE Accounting practice

Paper 2 structured question: Inter-firm comparison

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Inter-firm comparison

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Paper 2Structured Written Paper3 marks

Two firms in the same industry have different financial ratios.

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Comparison of Two Firms

Firm X has a current ratio of 1.5, while Firm Y has a current ratio of 2.0.

  1. a

    Discuss the implications of these current ratios for both firms.

    Aim for approximately 3 distinct marking points.

    [3]

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Paper 2 structured question: Inter-firm comparison

Paper 2Structured Written Paper2 marks

Data Table

Company Financial Data

The table below shows the financial data for two companies in the same industry.

Company ACompany B
Revenue: $500,000Revenue: $600,000
Net Profit: $50,000Net Profit: $70,000
Total Assets: $300,000Total Assets: $400,000
Current Liabilities: $100,000Current Liabilities: $150,000
  1. a

    Calculate the net profit margin for both companies.

    Aim for approximately 2 distinct marking points.

    [2]