Edexcel GCSE Business: Interpreting quantitative business data (1BS0) – Practice Questions

These are original questions written for Marlbridge, for revision and practice on this content. They are not reproduced past-paper questions, and they do not replicate the exam’s exact structure, question count or mark tariffs – examination boards hold copyright in their own papers. Use these alongside the official past papers from your board or school.

These questions cover Theme 2, Topic 2.4 Making financial decisions, item 2.4.2, from the Pearson Edexcel Level 1/Level 2 GCSE (9-1) in Business (1BS0) specification, Issue 2, July 2022. The specification says calculators may be used and that formulae are not provided, so learn them. All businesses and figures are invented.

Links: the Business hub, the printable checklist, the study guide, the revision notes and the free diagnostics.

Questions

1. Bramhope Garden Centre records monthly sales in thousands of pounds.

Month	Mar	Apr	May	Jun	Jul
Sales (£000)	28	36	45	42	30

(a) Identify the month with the highest sales. [1] (b) Calculate the mean monthly sales. [2] (c) Calculate the percentage change in sales from March to May. [2]

2. A pie chart shows the garden centre’s total sales of £181,000. The sector for garden furniture is 54°. Calculate the sales of garden furniture. [3]

3. Ellerby Toys has sales revenue of £320,000, cost of sales of £208,000, and other operating expenses and interest of £72,000. Calculate its gross profit, gross profit margin, net profit and net profit margin. [6]

4. In the previous year Ellerby Toys had sales revenue of £300,000, with margins of 38% (gross) and 14% (net). Use this and your answers to question 3 to analyse the change in the business’s profitability. [6]

5. Ellerby Toys can spend £48,000 on a machine, with expected profits over four years of £7,000, £11,000, £13,000 and £9,000. Or it can spend £30,000 on a website, with expected profits over three years of £4,000, £6,000 and £8,000. Calculate the average rate of return for each option and justify which one the owner should choose. [8]

6. Ravensthorpe Crafts has an opening balance of £2,000 in January.

	Jan	Feb	Mar
Cash inflows	£8,000	£7,500	£12,000
Cash outflows	£9,500	£10,300	£8,200
Net cash flow	−£1,500
Closing balance	£500

(a) Complete the table for February and March. [4] (b) Explain one way the business could respond to the forecast for February. [3]

7. Sedgley Candles asks 200 people at a weekend craft fair which scent they prefer: lavender 70, citrus 50, pine 30, no preference 50.

(a) Calculate the percentage who prefer lavender. [2] (b) Explain one reason the owner should be cautious about using this survey to choose scents for the whole year. [3]

8. Holm Juices had sales of £84,000 last year in a market worth £600,000. This year its sales are £90,000 in a market worth £750,000.

(a) Calculate the firm’s market share for last year and for this year. [2] (b) Calculate the percentage change in the total value of the market. [2] (c) Analyse what the data suggests about the firm’s position. [3]

9. Whinfell Preserves uses 12,000 kg of fruit a year and sells 120,000 jars at £3.50 each. The fruit price rises from £4.00 to £4.60 per kg.

(a) Calculate the percentage increase in the price of fruit. [2] (b) Calculate the extra annual cost of fruit. [2] (c) The owner can absorb the extra cost or raise the jar price. Justify which to choose. [4]

10. Explain two limitations of using financial information to understand business performance. [4]

11. Corrie Hostel has 40 beds. At £30 per bed per night, 55% of beds are occupied. Each occupied bed costs £6 a night in cleaning and laundry. Other costs do not change. The owner proposes £26 per night, expecting 70% occupancy. Rival hostels charge about £31. Evaluate whether the owner should cut the price. [10]

Answers

1. (a) May [1]. [1] (b) Total = 28 + 36 + 45 + 42 + 30 = 181 [1]; 181 / 5 = £36,200 (36.2 thousand) [1]. [2] (c) (45 − 28) / 28 × 100 [1] = 60.7% increase [1]. [2] Examiner insight: “Identify” is a reading task, so a one-word answer with the figure is enough. On percentage change, say increase or decrease and divide by the starting month.

2. 54 / 360 = 0.15, so 15% [1]. 15% of £181,000 = 0.15 × 181,000 [1] = £27,150 [1]. [3] Examiner insight: Turning the angle into a share first makes the method easy to follow and to check, which matters if a slip occurs in the final step.

3. Gross profit = 320,000 − 208,000 = £112,000 [1]. Gross profit margin = 112,000 / 320,000 × 100 [1] = 35% [1]. Net profit = 112,000 − 72,000 = £40,000 [1]. Net profit margin = 40,000 / 320,000 × 100 [1] = 12.5% [1]. [6] Examiner insight: Appendix 1 says workings should be shown when you calculate. Write each formula, and start net profit from gross profit rather than from sales revenue.

4. Last year gross profit = 38% × 300,000 = £114,000 and net profit = 14% × 300,000 = £42,000 [1]. Both margins fell: gross profit margin from 38% to 35% (3 points) and net profit margin from 14% to 12.5% (1.5 points) [1]. Sales revenue rose 6.7%, but cost of sales (£186,000 to £208,000) rose 11.8% [2]. Other expenses and interest were £72,000 in both years (114,000 − 42,000) [1], so the fall in net profit of £2,000 comes from cost of sales. The business should look at supplier costs or its prices [1]. [6] Examiner insight: Credit for “analyse” comes from using the numbers and following one cause through to its effect. Noting that sales rose while profit fell, and tracing why, shows more than listing the margins.

5. Machine: total profit £40,000 [1], average £10,000 [1], ARR = 10,000 / 48,000 × 100 = 20.8% [1]. Website: total £18,000, average £6,000 [1], ARR = 6,000 / 30,000 × 100 = 20% [1]. Justification: the machine’s ARR is only 0.8 percentage points higher [1], while it needs £18,000 more cash and its profit falls in year 4, so the forecast carries more risk [1]. Choose the website unless cash is plentiful, because almost the same return needs less money and carries less risk [1]. [8] Examiner insight: For “justify”, back one of the two options with figures from the stem and say why the other lost out. Either choice can be defended if the reason comes from the data.

6. (a) February: net cash flow = 7,500 − 10,300 = −£2,800 [1]; closing balance = 500 − 2,800 = −£2,300 [1]. March: net cash flow = 12,000 − 8,200 = £3,800 [1]; closing balance = −2,300 + 3,800 = £1,500 [1]. [4] (b) Arrange a short-term source of finance such as an overdraft [1]. This would cover the £2,300 shortfall in February [1], and the March inflow could repay it quickly, which keeps interest low [1]. (Asking customers to pay sooner is another valid way.) [3] Examiner insight: Keep the minus sign and carry February’s closing balance into March. Responses gain from naming the month and amount of the shortfall rather than saying “get money”.

7. (a) 70 / 200 × 100 [1] = 35% [1]. [2] (b) The people were all at one craft fair [1], so they may not represent the shop’s usual customers, such as people who buy online or at other times [1], and the preferences may differ from the whole year’s sales [1]. [3] Examiner insight: Cautions about data are rewarded when tied to the stem: here, where and when the sample was taken. A generic “the sample is too small” says less than a specific reason.

8. (a) Last year 84,000 / 600,000 × 100 = 14%; this year 90,000 / 750,000 × 100 = 12%. Each correct year earns one mark: [1] [1]. [2] (b) (750,000 − 600,000) / 600,000 × 100 [1] = 25% increase [1]. [2] (c) Sales rose 7.1% [1], but the market grew 25%, so market share fell from 14% to 12% [1]. Competitors are growing faster, so the firm is losing ground even though its sales are higher [1]. [3] Examiner insight: The key move is comparing the firm’s growth with the market’s growth. Writing “sales rose so it is doing well” misses what the share figures show.

9. (a) (4.60 − 4.00) / 4.00 × 100 [1] = 15% increase [1]. [2] (b) Price rise = £0.60 per kg [1]; 0.60 × 12,000 = £7,200 [1]. [2] (c) Extra cost per jar = 7,200 / 120,000 = 6p [1]. Raising the price by 6p is a 1.7% rise on £3.50 [1], which would cover the cost if sales hold [1]. Absorbing it cuts profit by £7,200. Raise the price, as the rise is small, but check rivals’ prices first because customers may buy less [1]. [4] Examiner insight: Turn the annual extra cost into a figure per jar so it can be compared with the price. A recommendation that ignores the risk to sales is only half-supported.

10. Limitation one: financial information is backward-looking [1], so it shows what has happened and may not reflect current conditions such as a new competitor [1]. Limitation two: it leaves out non-financial factors [1], for example staff morale or customer loyalty, which affect future performance but do not appear in a profit margin [1]. [4] Examiner insight: “Explain” asks for a statement of fact plus two expansion points, with no context needed. Each limitation needs its own development rather than a list of one-word items.

11. Now: occupied beds = 40 × 0.55 = 22; revenue = 22 × 30 = £660; costs = 22 × 6 = £132; left over = £528 a night [1] [1]. Proposal: 28 beds; revenue = 28 × 26 = £728; costs = 28 × 6 = £168; left over = £560 [1]. Gain of £32 a night, about £11,680 a year [1]. For: the gain is positive if the forecast is right. Against: it needs 26.4 occupied beds (66%) to match today’s £528, so the target of 70% leaves little room; at 25 beds (62.5%) the left-over is only £500, a loss of £28 a night [1]. The 70% is an estimate [1], and £26 is £5 below rivals, which may suggest lower quality, invite a price response, or draw more guests [1]. Non-financial factors such as reputation and staff workload are not in these figures [1]. Judgement: the gain is small (about 6%) for a real risk, so trial the lower price for a short period, or on quiet nights only, and track occupancy before changing permanently [2]. [10] Examiner insight: “Evaluate” needs figures for both sides, a statement of what would make the plan fail, and a conclusion that picks a course of action. A summary of the numbers with no judgement stops short.

Where marks are usually lost

• Dividing a percentage change by the new figure instead of the original.
• Giving a percentage change with no increase or decrease stated.
• Mixing up gross profit and net profit in a margin.
• Forgetting to divide by the number of years in an ARR question.
• Losing a minus sign on net cash flow, or not carrying the closing balance forward.
• Describing a survey result without questioning the sample.
• Assuming that higher sales must mean a higher market share.
• Writing general limitations with no link to the business in the question.
• Stopping an “evaluate” or “justify” answer before stating which course of action you back.

Next steps

• Review the revision notes and the study guide.
• Return to the Business hub or tick off progress on the checklist.
• Find weak spots with the free diagnostics.
• Book a free trial class: /trial/.

Frequently asked questions

What do these quantitative business data questions cover? They follow Pearson Edexcel GCSE Business (1BS0) Theme 2 item 2.4.2: taking information from graphs and charts, and using financial, marketing and market data, plus the use and limitations of financial information.

What does the command word Identify mean in a data question? Identify asks you to select the answer by reading a graph or table, so give the value and its unit. Calculate asks for working to be shown.

What are the most common mistakes in business data calculations? Dividing a percentage change by the new figure instead of the original, giving a percentage change without saying whether it is an increase or decrease, mixing up gross and net profit margins, and forgetting to divide by the number of years in an average rate of return.

Does higher sales always mean a higher market share? No. If the whole market grows faster than the business’s sales, its market share falls even though its sales have risen.

Official syllabus

Pearson Edexcel Level 1/Level 2 GCSE (9-1) in Business (1BS0), Specification, Issue 2, July 2022, published by Pearson Education Limited. Theme 2, Topic 2.4 Making financial decisions, item 2.4.2.