Analysis of Published Accounts

Worked examples (6)

• 1Calculate and interpret the current ratio (3 marks)
• 2Calculate the acid test ratio (3 marks)
• 3Compare the current and acid test ratios (5 marks)
• 4Effect of selling inventory for cash on liquidity (5 marks)
• 5Evaluate a method of improving liquidity (8 marks)
• 6Analyse why a profitable firm can have a liquidity problem (6 marks)

Model answers (6)

• ✓Model answer — 9609 Paper 3 style
• ✓Model answer — 9609 Paper 3 style
• ✓Model answer — 9609 Paper 3 style
• ✓Model answer — 9609 Paper 4 style
• ✓Model answer — 9609 Paper 3 style
• ✓Model answer — 9609 Paper 4 style

Worked examples (6)

• 1Calculate the gross profit margin (3 marks)
• 2Calculate the operating profit margin (3 marks)
• 3Calculate ROCE (5 marks)
• 4Compare gross and operating margins (5 marks)
• 5Evaluate raising price to improve profitability (8 marks)
• 6Analyse why ROCE is the primary profitability ratio (6 marks)

Model answers (6)

• ✓Model answer — 9609 Paper 3 style
• ✓Model answer — 9609 Paper 3 style
• ✓Model answer — 9609 Paper 3 style
• ✓Model answer — 9609 Paper 4 style
• ✓Model answer — 9609 Paper 3 style
• ✓Model answer — 9609 Paper 4 style

Worked examples (6)

• 1Calculate the rate of inventory turnover (3 marks)
• 2Calculate trade receivables (days) (3 marks)
• 3Calculate trade payables (days) (3 marks)
• 4Compare receivables and payables days (5 marks)
• 5Evaluate JIT to improve inventory turnover (8 marks)
• 6Analyse how efficiency ratios affect liquidity (6 marks)

Model answers (6)

• ✓Model answer — 9609 Paper 3 style
• ✓Model answer — 9609 Paper 3 style
• ✓Model answer — 9609 Paper 3 style
• ✓Model answer — 9609 Paper 4 style
• ✓Model answer — 9609 Paper 3 style
• ✓Model answer — 9609 Paper 4 style

Worked examples (6)

• 1Calculate the dividend per share (2 marks)
• 2Calculate the dividend yield (3 marks)
• 3Calculate the dividend cover (3 marks)
• 4Calculate the P/E ratio and interpret it (5 marks)
• 5What-if: effect of a falling share price on the ratios (8 marks)
• 6Analyse methods of improving the return to investors (6 marks)

Model answers (6)

• ✓Model answer — 9609 Paper 3 style
• ✓Model answer — 9609 Paper 3 style
• ✓Model answer — 9609 Paper 3 / Paper 4 style
• ✓Model answer — 9609 Paper 4 style
• ✓Model answer — 9609 Paper 3 style
• ✓Model answer — 9609 Paper 4 style

Worked examples (6)

• 1Calculate capital employed (2 marks)
• 2Calculate the gearing ratio (3 marks)
• 3Interpret a gearing ratio (3 marks)
• 4Explain how high gearing can boost shareholder returns (5 marks)
• 5What-if: effect of rising interest rates on a high-geared firm (8 marks)
• 6Analyse methods of reducing high gearing (6 marks)

Model answers (6)

• ✓Model answer — 9609 Paper 3 style
• ✓Model answer — 9609 Paper 3 style
• ✓Model answer — 9609 Paper 3 / Paper 4 style
• ✓Model answer — 9609 Paper 4 style
• ✓Model answer — 9609 Paper 3 style
• ✓Model answer — 9609 Paper 4 style