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Cambridge IGCSE Business Studies practice

Paper 1 structured question: Analysis of accounts

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Analysis of accounts

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Paper 1Short Answer and Data Response3 marks

A business is considering taking a loan and has provided its financial ratios.

Description

Financial Ratios Overview

The business has a current ratio of 1.5 and a debt-to-equity ratio of 0.5.

  1. a

    Explain the significance of the current ratio for the business's loan application.

    Aim for approximately 3 distinct marking points.

    [3]

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Paper 1 structured question: Analysis of accounts

Paper 1Short Answer and Data Response1 marks

Data Table

Company Financial Data

The table below shows the company's revenue and net profit for the last two years.

YearRevenueNet Profit
2022$500,000$50,000
2023$600,000$70,000
  1. a

    State the net profit for 2023.

    Aim for approximately 1 distinct marking point.

    [1]