CAIE IGCSE Business Studies 5.3 Profit and Loss Questions
Practise explaining why profit matters, using profit or loss data, and judging business decisions from revenue, costs and expenses.
- Syllabus
- 2027–2029
- Course
- Business 0264
Exam points
- calculate missing expenses, profit or cost figures from income statement extracts
- justify profit decisions by linking revenue, costs and business aims to the case
- compare profit evidence for two businesses before recommending an option
Covered syllabus points
Question 1
Alana opened a restaurant in the city centre 5 years ago. The restaurant provides plant-based meals using a range of vegetables. Alana uses primary market research to help identify changes in consumer spending patterns. Market research can also be used to help segment a market. The restaurant has 16 employees. Each employee is paid the legal minimum wage. In 2023 the business made a profit of $ 80000. Alana wants to know how an increase in interest rates might affect her business.
Define 'profit'.
Question 2
Elton is a sole trader. He sells specialist clothing and equipment for sports, including baseball and hockey. It is a niche market. Elton started his business 5 years ago and it has remained small. A wide range of inventory is important. Elton has been looking at the financial performance of his business. The profit margin for 2018 was 35%. An extract of the accounts is shown in Table 3.1.
Table 3.1
Calculate X and Y.
X:
Y:
Question 3
TJM is a private limited company. It is a food retailer and has 450 shops. In 2021 TJM's revenue increased by $ 500 million. The Finance Director is analysing TJM's financial statements. An extract is shown in Table 2.1. The directors are planning to expand TJM by opening 20 new shops. TJM will have to carry out a recruitment and selection process for 400 new employees.
Table 2.1
Explain two possible reasons why profit might be important to TJM.
Reason 1:
Explanation:
Reason 2:
Explanation:
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