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Cambridge IGCSE Accounting

6.2Interpretation of accounting ratios

Interpretation of accounting ratios in Cambridge IGCSE Accounting: what the syllabus expects you to know, the learning objectives and how to practise.
Subtopic20 practice questions1 lesson
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Learning objectives

What the syllabus expects you to be able to do.

  1. 6.2.1Prepare and comment on comparisons of results for different years and interpret the ratios.
  2. 6.2.2Suggest improvements to profitability, liquidity and working capital.
  3. 6.2.3Explain what affects gross profit and profit for the year and why cash and profit differ.

Lessons

  • Interpreting financial statements and ratios

    40 min

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Sample question

A sample question on this topic. Answer it, check it, then read the worked answer.

Interpretation of accounting ratios: sample question

1 mark

A trader's revenue rose by 15% but her gross profit margin fell. Which is the most likely cause?

Choose one answer

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