CAIE A-Level Business 10.2 Investment Ratio Formulae

Practise selecting and applying price/earnings, dividend yield and dividend cover formulae from per-share or annual figures and interpreting what the result means to investors.

Exam points

calculate P/E as market price per share ÷ earnings per share using consistent units
calculate dividend cover as profit for the year ÷ annual dividend and state the ratio
interpret an investment ratio through return, distribution cover, expectations and investor risk

[Maximum number: 1]

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

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Formula reference—Investment ratios question 1