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

Analysis and communication of accounting information — practice question

N Limited operates as a trading company. Its statement of financial position on 31 December 2021 is shown below.
(a(i))[3]

Calculate the trade payables turnover (days) for the year ended 31 December 2021, and state the formula you use.

(a(ii))[3]

Calculate the trade receivables turnover (days) for the year ended 31 December 2021, and state the formula you use.

(a(iii))[3]

Calculate the return on capital employed (to two decimal places) for the year ended 31 December 2021, and state the formula you use.

(a(iv))[2]

Calculate the following ratios for the year ended 31 December 2021, and state the formula used. Non-current asset turnover (to two decimal places).

(b)[2]

Explain the importance of this non-current asset turnover to the directors of N Limited.

(c)[2]

Explain one reason why shareholders will be interested in the financial statements of a company.

Worked solution & mark scheme

This 15-mark question has a full step-by-step worked solution and mark scheme. One marking point: Formula used: Trade payables \times 365 / Credit purchases

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