Edexcel IGCSE Business: What makes a business successful (4BS1) – 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.

Every business named here is invented, and amounts are in dollars. These questions cover Topic 1, section 1.8 “What makes a business successful?” in the Pearson Edexcel International GCSE in Business (4BS1) specification, Issue 2, February 2026: points 1.8.1 and 1.8.2. Use the study guide and revision notes first if you need them. Course links: the 4BS1 Business hub, the printable checklist and the free diagnostics.

Questions

1. Define the term “market share”. [2]

2. Give two reasons why a business may fail. [2]

3. Crestwell Tiles had revenue of 400,000 last year and 448,000 this year. Calculate the percentage growth in revenue. [2]

4. Orlestone Snacks sold 27 million dollars of goods in a market worth 180 million dollars in Year 1. In Year 2 it sold 33 million in a market worth 220 million.

(a) Calculate Orlestone’s market share in each year. [2] (b) Orlestone’s sales rose between the years. Explain what your answers show about its performance against rivals. [2]

5. Thorsby Printers has revenue of 640,000, cost of sales of 432,000 and other operating expenses of 140,800.

(a) Calculate gross profit. [1] (b) Calculate the gross profit margin. [1] (c) Calculate operating profit. [1] (d) Calculate the operating profit margin. [1] (e) Outline one way the owner could raise the operating profit margin. [2]

6. Yeadon Gifts began May overdrawn, with a bank balance of −2,000.

	May	June	July
Cash in	26,000	24,000	30,000
Cash out	31,000	29,000	22,000

(a) Complete the net cash flow and closing balance for each month. [3] (b) Explain why a business that makes a profit may still have cash flow problems. [3]

7. Barnsdale Cycles surveyed 425 customers in Year 1 and 340 said they were satisfied. In Year 2 it surveyed 500 customers and 360 said they were satisfied.

(a) Calculate the customer satisfaction rate for each year. [2] (b) Outline one reason why the change matters to the business. [2]

8. Cottesby Windows has 60 employees in both years.

	Year 1	Year 2
Revenue	760,000	836,000
Cost of sales	475,000	543,400
Other operating expenses	171,000	209,000
Employees who left in the year	6	12

Evaluate whether Cottesby was more successful in Year 2 than in Year 1. [8]

9. Deepdale Logistics has 70 employees. During the year 14 of them left.

(a) Calculate the percentage of employees who left. [1] (b) Analyse how a high number of employees leaving could affect the business. [5]

10. Explain one way in which owner/shareholder satisfaction can conflict with another measure of business success. [3]

11. Nutwell Coaches runs week-long coach tours. Over five years more of its customers have started booking short breaks online. Nutwell still takes bookings by telephone only and still sells only seven-day tours. A rival now offers weekend trips booked through an app. Nutwell’s revenue has fallen each year and its bank balance is now below zero. Analyse why failure to adapt to changes in the market may lead Nutwell to fail. [6]

12. A bank can lend to one of two small manufacturers. Both have revenue of 600,000.

	Tarleton	Upwood
Cost of sales	390,000	330,000
Other operating expenses	150,000	177,000
Bank balance at start of quarter	3,000	−1,000
Net cash flow, month 1	4,000	−6,000
Net cash flow, month 2	4,500	−6,000
Net cash flow, month 3	5,000	−3,000

Justify which business the bank should lend to. [8]

Answers

1. Market share is the percentage [1] of total sales in a market that is won by one business [1]. [2] Examiner insight: A definition earns credit when it says what the percentage is of; “how big a business is” is too vague to separate it from revenue.

2. Any two of: cash flow problems/lack of finance [1]; not competitive [1]; failure to adapt to changes in the market. [2] Examiner insight: A “give” question tests recall, so two short, distinct reasons are enough; repeating one cause in different words is one reason.

3. Change = 448,000 − 400,000 = 48,000 [1]. 48,000 ÷ 400,000 × 100 = 12% [1]. [2] Examiner insight: Show the working in a calculate question so each step can be seen; divide by the old figure, not the new one.

4. (a) Year 1: 27 ÷ 180 × 100 = 15% [1]. Year 2: 33 ÷ 220 × 100 = 15% [1]. (b) Sales grew by 6 million, which is 22.2% [1], but market share did not change, so Orlestone only kept pace with the market and did not win ground from rivals [1]. [4] Examiner insight: Put the result into words for the business; the comparison with rivals is what answers the question.

5. (a) 640,000 − 432,000 = 208,000 [1]. (b) 208,000 ÷ 640,000 × 100 = 32.5% [1]. (c) 208,000 − 140,800 = 67,200 [1]. (d) 67,200 ÷ 640,000 × 100 = 10.5% [1]. (e) Reduce cost of sales by buying materials from a cheaper supplier [1], so gross profit and operating profit rise for the same revenue [1]. (Cutting other operating expenses, such as energy use, with the same linked effect is equally valid.) [6] Examiner insight: An “outline” answer needs two linked points, so name the action and then say what it does to profit; an action with no effect described is incomplete.

6. (a) May: net cash flow 26,000 − 31,000 = −5,000; closing −2,000 − 5,000 = −7,000 [1]. June: net −5,000; closing −12,000 [1]. July: net +8,000; closing −4,000 [1]. (b) Profit is revenue minus costs, but cash only moves when money is paid [1]. If customers buy on credit and pay late, the business has recorded revenue but has no money yet [1]. Meanwhile it must pay wages and suppliers now, so the bank balance can go below zero [1]. [6] Examiner insight: Carry each closing balance forward as the next opening balance; a slip in May spreads to the other months, so show every step.

7. (a) Year 1: 340 ÷ 425 × 100 = 80% [1]. Year 2: 360 ÷ 500 × 100 = 72% [1]. (b) Lower satisfaction means customers are less likely to buy again [1], so future revenue and market share may fall [1]. [4] Examiner insight: Tie the change to a consequence for the business, not only to a description of the fall.

8. Year 1: gross profit = 760,000 − 475,000 = 285,000, a margin of 37.5% [1]. Operating profit = 285,000 − 171,000 = 114,000, a margin of 15% [1]. Year 2: gross profit = 836,000 − 543,400 = 292,600, a margin of 35% [1]. Operating profit = 292,600 − 209,000 = 83,600, a margin of 10% [1]. For Year 2: revenue grew by 76,000, which is 10% [1]. Against: operating profit fell from 114,000 to 83,600, a fall of 26.7%, and both margins fell, so costs grew faster than revenue [1]. The number of employees leaving doubled from 6 to 12, which is 20% of staff against 10%, suggesting lower employee satisfaction and extra recruitment costs [1]. Judgement: on growth alone Year 2 looks better, but profit, both margins and employee satisfaction all moved the wrong way, so Year 2 was less successful overall. The firm should find out why cost of sales and other operating expenses rose faster than revenue [1]. [8] Examiner insight: Weigh the measures against each other and reach a judgement; figures with no verdict leave out the part an evaluate answer needs most.

9. (a) 14 ÷ 70 × 100 = 20% [1]. (b) One in five staff leaving means the business must recruit replacements [1], which costs money in advertising and interviewing [1]. New staff must be trained and are less experienced at first [1], so output or service quality may fall [1], and unhappy customers may buy elsewhere, reducing revenue and profit [1]. [6] Examiner insight: An analyse answer is a chain: cause, effect on the business, and a further consequence; each link in the chain is where the credit is.

10. A company can pay out a large dividend, which pleases shareholders [1]. But paying out more leaves less profit kept in the business [1], so there is less to spend on new equipment or on better pay, which may lower growth or employee satisfaction [1]. [3] Examiner insight: An “explain” answer is a statement followed by two developments; stating only that “shareholders want money” gains little without the effect on the other measure.

11. Customers’ booking habits have moved online, but Nutwell has not changed its phone-only bookings [1]. This makes Nutwell less convenient than the rival, so customers choose the rival [1]. Customers also want shorter breaks and Nutwell sells only seven-day tours, so its product no longer matches demand [1]. Revenue falls as fewer tours are sold [1]. Nutwell’s costs, such as coaches and drivers, stay the same, so cash out is larger than cash in and the bank balance goes below zero [1]. Without finance to cover the gap it may be unable to pay its bills, which is how failure follows [1]. [6] Examiner insight: Use the details in the stem (phone-only booking, seven-day tours, the rival’s app) rather than general statements; context is what turns knowledge into analysis.

12. Tarleton: gross profit = 600,000 − 390,000 = 210,000, a margin of 35%; operating profit = 210,000 − 150,000 = 60,000, a margin of 10% [1]. Upwood: gross profit = 600,000 − 330,000 = 270,000, a margin of 45%; operating profit = 270,000 − 177,000 = 93,000, a margin of 15.5% [1]. Tarleton’s cash: net flows of 4,000, 4,500 and 5,000 take the balance from 3,000 to 7,000, 11,500 and 16,500 [1]. Upwood’s cash: net flows of −6,000, −6,000 and −3,000 take the balance from −1,000 to −7,000, −13,000 and −16,000 [1]. For Upwood: higher margins on the same revenue show it is the more profitable business and may be better placed over time [1]. Against Upwood: it is overdrawn and the gap is widening, so it may struggle to pay a lender back on time [1]. For Tarleton: its cash is positive and rising, which suggests it can repay [1]. Judgement: the bank should lend to Tarleton, because positive cash flow matters most when the bank needs repayments, although Upwood’s profit margins mean it would be worth reconsidering once its cash flow improves [1]. [8] Examiner insight: A justify answer recommends one of the two options and says why the other was rejected; picking the more profitable business without addressing its cash position leaves out half of the data.

Where marks are usually lost

• Using sales instead of revenue.
• Dividing a change by the new figure, not the original one.
• Using cost of sales as the base for a margin instead of revenue.
• Giving a market share with no market or time period.
• Reading a rise in sales as a rise in market share.
• Writing a list of failure reasons without applying them to the business in the stem.
• Finishing an evaluate or justify question without a clear judgement and reason.

Next steps

Review the revision notes and study guide for anything you missed. Return to the 4BS1 Business hub, tick the checklist, try the free diagnostics, or book a free trial class.

Frequently asked questions

What do these business success practice questions cover? They follow section 1.8 of Pearson Edexcel International GCSE Business (4BS1): the measures of success, such as revenue, market share, profit, growth and satisfaction, and the reasons businesses fail.

Should you write “sales” or “revenue” in Edexcel IGCSE Business answers? Use revenue. The 4BS1 specification’s glossary says assessments use the term revenue, so writing “sales” where revenue is meant is listed as a common slip.

What base should you use for a profit margin? Divide the profit by revenue, not by cost of sales. Using cost of sales as the base is a common error.

How should you answer a question on why a business failed? Apply the reason, such as cash flow problems, not being competitive or failing to adapt, to the business in the case, and finish with a clear judgement and reason.

Official syllabus

Pearson Edexcel International GCSE in Business (4BS1), Specification, Issue 2, February 2026, published by Pearson Education Limited. Topic 1: Business activity and influences on business, section 1.8 “What makes a business successful?”, points 1.8.1 and 1.8.2.