Accounting 0452 · IGCSE · Interpretation of accounting ratios

Interpretation of accounting ratios — practice question

Carlos runs a business that sells computer equipment. The information below was supplied for the year ending 31 July 2020.
(a)[1]

Calculate the profit made in the year ended 31 July 2020.

(b)[6]

Calculate the three ratios and give each answer to two decimal places.

(c)[6]

Comment on how Carlos’s business performed across the two years, 2019 and 2020.

(d)[5]

Advise Carlos which option he ought to choose. Support your answer by giving one advantage and one disadvantage of each option.

(e)[2]

State the name of one party, other than himself and his employees, who might be interested in Carlos’s financial statements. State one reason for that interest.

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