3.3.5.2a - Financial ratio calculation

Calculate and interpret gross profit margin, operating profit margin, profit-for-the-year margin, current ratio, acid-test ratio, gearing and return on capital employed using the prescribed financial statements and formulae.

Use a - financial ratio calculation to connect the rule to the data and decision in the question.

This matters because a - financial ratio calculation determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - financial ratio calculation to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - Financial ratio calculation is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.