What this practice covers
These questions are drawn from past CIE 0264 Business papers and filtered to analysis of accounts. You answer, you find out immediately whether you were right, and you get the reasoning for the correct option and for each distractor. Wrong answers go to a mistakes locker so you can come back to exactly those.
Practice is free. You need an account only so your progress and your mistakes are still there next time.
Start practising practice questions →
What examiners see students get wrong here
These are the errors that cost marks on analysis of accounts, taken from our own topic notes. Read them before you practise and you will recognise the traps in the questions.
- Dividing by the wrong figure. Both margins are divided by revenue; ROCE is divided by capital employed.
- Using gross profit in ROCE, or profit in the gross profit margin.
- Forgetting to multiply by 100, and giving 0.4 where the answer is 40%.
- Forgetting to take inventory off the current assets in the acid test.
- Saying a current ratio of 4 : 1 is excellent. It usually means idle cash and stock.
- Treating a high gross profit margin as proof of health, when expenses may swallow all of it.
- Calculating all five ratios and comparing none with last year.
- Saying a fall is bad without giving a reason it might have fallen.
Revise it first
If any of the above is unfamiliar, work through the notes before practising: Analysis of accounts revision notes.