CAIE A-Level Business 10.2 Analysis of Published Accounts Question Bank

Refer to Table 1.1. Calculate, for 2023, the current ratio.

Responses may include:

CR = Current Assets / Current Liabilities
0.6 / 0.8=0.75: 1(1)

Accept 0.75 OR 3:4 or $\frac{3}{4}$ (1)

Note:

0.75 m or $0.75 / 1 \mathrm{~m}$ (0)

Refer to Table 1.1. Calculate, for 2023, the return on capital employed (ROCE).

Indicative content

Responses may include:

ROCE = Profit from operations / capital employed × 100

OR

Capital employed = NCL + shareholder capital

OR

Capital employed = issued shares + reserves + non-current liabilities (1 mark if no relevant calculation)

Note: ROCE = Net profit / capital employed × 100 is incorrect and not rewardable.

CE=7+3.2=10.2(1)

$\mathrm{ROCE}=1.3 / 10.2 \times 100(2)$

=12.7 % OR 13\% OR 12.75\% (3)

Accept 12.7 or 13 or 12.75 (3)

Allow 12.8 (3)

Alternative calculations

2022 ROCE is 9.9\% (2)

Accept 9.9 (2)

1.3 / $3.2 \times 100=40.6 \%$ (2) NCL not included in calculation of CE

$1.3 / 7 \times 100=18.6 \%(2)$ Shareholder equity not included in calculation of CE

Refer to Table 1.1. For 2024, calculate the price earnings ratio.

Indicative content

PE Ratio = Market price per share / earnings per share

= 4.00 / 0.6 = 6.67 (1 mark) Accept 6.7, 6.66

Refer to Table 1.1. For 2024, calculate the return on capital employed.

Indicative content

Responses may include:

ROCE = Profit from operations / Capital employed × 100

and / or capital employed = issued shares + reserves + non-current liabilities (1 mark if no relevant calculation)

CE $=3+13.5+16=32.5 \mathrm{~m}(1)$

ROCE $=2.6 / 32.5 \times 100(2)$

ROCE =8 % (3)

Accept 8 (3)

Other answers and marks:

ROCE for 2023

$2.5 / 30.8 \times 100=8.12 \%(2)$

One element of CE not included (2).

$2.6 / 16.5 \times 100=15.76 \%$$2.6 / 29.5 \times 100=8.81 \%$$2.6 / 19 \times 100=13.68 \%$

OFR