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IB Business Management HL 3.5.3 Liquidity ratios Question Bank

Practise IB Business Management SL/HL 3.5.3 by applying liquidity ratios concepts to exam-style questions.

Syllabus
First assessment 2024
Course
Business management HL
Level
HL

Exam points

  • identify the relevant model, concept or evidence
  • apply the correct subject framework to the question
  • evaluate the result using clear evidence and subject terminology

3.5.3—Liquidity ratios question 1

[Maximum number: 1]

Papel



Papel manufactures and sells paper bags. It pays cash for 80 % of its raw materials but, to remain competitive, it must sell on credit to all customers. Many debtors are not paying on time and creditors (suppliers) are increasing. The board of directors is concerned about Papel's liquidity position.

The finance manager has provided information from Papel's accounts.

Table 1: Selected information from Papel's accounts at 31 October 2018

Table 1: Selected information from Papel's accounts at 31 October 2018

Using information from Table 1:

calculate the current ratio for Papel for the end of October 2018.

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