Accounting 9706 · AS & A Level · Analysis and communication of accounting information

Analysis and communication of accounting information — practice question

Read Source A2 in the insert first.
(a)[9]

Prepare the total assets section of the statement of financial position at 31 December 2020, with cash and cash equivalents shown as the balancing figure. Use the space provided for your workings.

(b)[3]

Calculate the working capital cycle in days.

(c)[3]

Compare D Limited’s performance across the two years by referring to non-current asset turnover and the working capital cycle.

(d)[6]

Explain two likely reasons for the change in the ratio from 2019 to 2020.

(e)[4]

State any four limitations of ratio analysis.

Worked solution & mark scheme

This 25-mark question has a full step-by-step worked solution and mark scheme. One marking point: Non-current assets amount to $438 000

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