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

Analysis and communication of accounting information — practice question

Suki uses ratios to judge how efficiently her business is running. The information below is given.
(a(i))[2]

Calculate the trade payables turnover (days), and state the formula used.

(a(ii))[2]

Calculate the trade receivables turnover (days), and state the formula used.

(b)[6]

Discuss the performance of Suki’s business by comparing 2023 with 2022.

(c)[3]

Calculate, to two decimal places, the inventory turnover rate, and state the formula used.

(d)[2]

Explain why the rate of inventory turnover matters to a business.

Worked solution & mark scheme

This 15-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Correct formula given: Trade payables \times 365 / Credit purchases” …

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