CAIE A-Level Business Formula reference Financial efficiency ratios
Practise applying efficiency-ratio formulae to table or appendix data, then stating what turnover days or inventory movement show.
- Syllabus
- 2026–2028
- Course
- Business 9609
- Level
- A2
Exam points
- calculate trade receivables days from trade receivables and credit sales data
- calculate inventory turnover using cost of sales and average inventory from an appendix
Formula reference—Financial efficiency ratios question 1
[Maximum number: 3]
Refer to Appendix 1. Calculate CQ's rate of inventory turnover.
Refer to Appendix 1. Calculate CQ's rate of inventory turnover.
Responses may include:
Inventory turnover = cost of sales / average inventory and/or
Cost of sales = revenue - gross profit (1 mark if no relevant calculation)
Cost of sales =1.2−0.8=$0.4 m (1)
Inventory turnover =0.4 / 0.13(2)
Inventory turnover = 3.077 OR 3.08 OR 3.1 OR 3 times (3)
Incorrect unit for final answer e.g. $3.077 OR 3.077\% OR 3.077 days (2)
If expressed in days then:
Inventory turnover = average inventory / cost of sales X 365 (1 mark if no relevant calculation)
Inventory turnover =0.13/0.4×365(2)
=118.6 days OR 119 days ( 3 )
If correct equation stated but then calculation shows 1.2 / 0.13 = 9.23 (2)
Accept all valid responses.
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