Learning objective

Learn how to assess a company's financial performance by calculating and analyzing profitability and liquidity ratios, including gross profit margin, profit margin, return on capital employed, current ratio, and acid test ratio.

Read the explanation, check the common trap, then practise with flashcards and questions.

Exam focus

Cambridge IGCSE Business StudiesFinancial information and decisions

Study support

Understand this objective

Quick explanation

This point belongs to Analysis of accounts, especially Analysis of accounts outcomes.
You need to be able to learn how to assess a company's financial performance by calculating and analyzing profitability and liquidity ratios, including gross profit margin, profit margin, return on capital employed, current ratio, and acid test ratio.
The key ideas to know are Calculate and Explain.
Use the linked flashcards and practice questions to check recall, then practise applying the idea in an exam-style answer.

Key concepts

CalculateExplain

Why it matters

This objective helps connect Analysis of accounts outcomes to exam-style questions, flashcards, and revision notes for Analysis of accounts.

Revision tools