ConceptConceptDocsDocuments

CAIE IGCSE Business Studies 5.5 analysis of accounts

Use this accounts-analysis page to interpret ratios, compare financial performance and explain how users rely on accounts.

Syllabus
2027–2029
Course
Business 0264

Exam points

  • Interpret profitability and liquidity changes using figures from the case appendix.
  • Explain how suppliers, shareholders, banks or managers use financial information.
  • Justify decisions such as takeover choice or shop closure using appropriate ratios.

Covered syllabus points

5.5.1—Profitability5.5.2—Liquidity5.5.3—Users of accounts

5.5. Analysis of accounts question 1

[Maximum number: 10]

GTB is a business which operates in the tertiary sector．It owns 5 cafés selling food and drinks． The business uses social media as its method of promotion．The Finance Manager，Moeen，is analysing GTB＇s financial statements．An extract is shown in Table 2．1．He is considering ways to improve GTB＇s profit margin．Moeen knows there are other users that are interested in the accounts of a business．

Table 2.1

Table 2.1

Question (a)

(a)

（c）Outline two ways GTB could improve its profit margin．

Way 1：

Way 2：

[ 4 ]

Question (b)

(b)

Do you think banks are the main external users of the accounts of a business? Justify your answer.

[ 6 ]

5.5. Analysis of accounts question 2

[Maximum number: 4]

AHG is an established business as it has been operating for a long time. It sells garden products including plants and flowers. AHG uses competitive pricing. The business has 4 managers and 30 other employees. All AHG's managers use delegation. The Finance Manager is analysing AHG's statement of financial position as she is interested in its liquidity. An extract is shown in Table 1.1.

Table 1.1

Table 1.1

Outline two possible reasons why liquidity is important to AHG.

Reason 1:
Reason 2:

All question bank results loaded