OxfordAQA A-Level Accounting: Interpretation, analysis and communication of accounting information (9615) – 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 section 3.2.9, Interpretation, analysis and communication of accounting information, of the OxfordAQA International AS and A-level Accounting (9615) specification, Version 1.2, for International AS exams May/June 2025 onwards and International A-level exams May/June 2026 onwards. Everything here is International A-level only, and the specification places 3.2.9 in both Paper 3 and Paper 4. Each company and number is made up; money is in dollars, with share prices in cents.

Learn the content in the study guide first. International AS ratios are practised in the 3.1.8 questions. See also the OxfordAQA accounting hub, the printable 9615 checklist and the free diagnostics.

Questions

1. State the formula for (a) the price earnings ratio and (b) interest cover. [2]

2. Corbelle Sails plc made a profit after tax of 1,890,000. It has 18,000,000 issued ordinary shares, paid ordinary dividends of 630,000, and its share price is 126 cents. Calculate the earnings per share, dividend per share, dividend yield and price earnings ratio. [4]

3. Lissomer Paints plc made a profit after interest and tax of 840,000 and paid ordinary dividends of 600,000.

(a) Calculate dividend cover. [1] (b) Explain what this result shows to a shareholder. [2]

4. Pannard Ltd has profit before interest and tax of 528,000 and interest payable of 165,000. It has asked its bank for a further loan of 600,000 at 10% a year.

(a) Calculate the current interest cover. [1] (b) Calculate interest cover if the loan is made and profit before interest and tax is unchanged. [2] (c) Give one reason the bank might lend and one reason it might refuse. [2]

5. Kestmoor Chairs Ltd is preparing information for three stakeholders: a supplier, a lender and its employees. For each, identify one item of accounting information it would want and explain why. [6]

6. Mei Tavistrand runs a florist and keeps manual double entry records. Explain two advantages and two disadvantages of moving to accounting software. [4]

7. Owen Haverleigh, a gardener, records only cash received and paid. Explain one advantage of this single entry system and two disadvantages compared with double entry. [3]

8. Wickmere Paper plc has current assets of 720,000, including inventory of 270,000, and current liabilities of 360,000. Treat each transaction separately. For each, state the effect on profit and calculate the new current ratio.

(a) 400,000 of ordinary shares are issued for cash. [2] (b) An ordinary dividend of 90,000 is paid. [2] (c) Inventory costing 40,000 is sold on credit for 64,000. [2]

9. Glanvor Ferries plc, year ended 31 March 2026: profit before interest and tax 5,040,000; interest payable 720,000; tax 864,000; 24,000,000 issued ordinary shares; ordinary dividends paid 2,304,000; share price 216 cents.

	Glanvor 2025	Glanvor 2026	Rival 2026
EPS (cents)	12.0	?	22.0
Dividend cover (times)	2.00	?	3.20
Interest cover (times)	9.50	?	12.00
Price earnings (times)	14.0	?	11.0
Dividend yield	3.57%	4.44%	2.84%
Capital gearing	30%	38%	18%

(a) Calculate the four missing ratios for Glanvor 2026. [4] (b) A pension fund manager who wants dependable dividends asks whether to buy Glanvor shares. Evaluate Glanvor as an investment, using the table, and make a recommendation. [8]

10. Kestmoor Chairs Ltd’s upholstery department budgeted to make 2,000 chairs with materials of 96,000 and labour of 60,000. It made 2,300 chairs; materials cost 117,300 and labour 64,400.

(a) Calculate the budgeted and actual material and labour cost per chair. [2] (b) The manager says the department “overspent by 25,700”. Assess this claim. [3]

11. The directors of Pendrick Bicycles plc recommend replacing the solvent-based paint line in its frame works with a powder-coating line costing 1,260,000. Paint and hazardous-waste disposal costs would fall by 395,000 a year, but the curing ovens would add 35,000 a year to electricity costs. The line needs eight technicians instead of twenty-two painters.

(a) Calculate the net annual saving and the payback period, in months. [3] (b) Assess the recommendation. Consider the effects on stakeholders, on the local and national economy, and on the environment. [9]

Answers

1. (a) Market price per share / Earnings per share [1] (b) Profit before interest and tax / Interest payable [1] [2] Examiner insight: Write the formula in words, not an example calculation, when the command word is “State”.

2. EPS = 189,000,000 / 18,000,000 = 10.5 cents [1] Dividend per share = 63,000,000 / 18,000,000 = 3.5 cents [1] Dividend yield = 3.5 / 126 × 100 = 2.78% [1] Price earnings = 126 / 10.5 = 12.0 times [1] [4] Examiner insight: Keep every figure in cents; a share price in cents divided by EPS in dollars gives an answer a hundred times too big.

3. (a) 840,000 / 600,000 = 1.40 times [1] (b) Profit covers the dividend only 1.4 times, so about 71% of profit after tax is paid out [1]; a modest fall in profit could force a cut, so the dividend is not secure [1]. [3] Examiner insight: “Explain” needs a consequence for the reader, not just a restatement of the number.

4. (a) 528,000 / 165,000 = 3.20 times [1] (b) New interest = 165,000 + 60,000 = 225,000 [1]; 528,000 / 225,000 = 2.35 times [1] (c) Lend: profit would still cover interest more than twice, and the loan may be secured on assets [1]. Refuse: cover would be thin, so a small fall in profit could leave interest unpaid [1]. [5] Examiner insight: In part (b), show the new interest figure separately so your method is visible even if the division slips.

5. Supplier: liquid capital ratio or trade payable days [1], to judge whether and how quickly it will be paid for goods supplied on credit [1]. Lender: interest cover or capital gearing [1], to judge whether interest and the loan can be repaid [1]. Employees: profit trend or forecast profit [1], to judge job security and the scope for pay rises [1]. [6] Examiner insight: Match each stakeholder to a specific measure; “the financial statements” is too vague to earn credit.

6. Advantages: one input posts both sides, so records are faster and arithmetically accurate [1]; reports such as the bank reconciliation are available at once [1]. Disadvantages: cost of software, a computer and training for a small business [1]; data can be lost or hacked, and wrong inputs are still accepted [1]. [4] Examiner insight: Apply points to a small florist (for example, the cost relative to its size) rather than writing a generic list.

7. Advantage: cheap and quick, needing little bookkeeping skill [1]. Disadvantages: there is no trial balance, so errors are hard to find [1]; there is no full record of assets, liabilities, receivables and payables, so statements must be rebuilt [1]. [3] Examiner insight: Each disadvantage needs its own reason; two versions of “less accurate” usually count as one point.

8. (a) No effect on profit [1]; 1,120,000 / 360,000 = 3.11 : 1 [1] (b) No effect on profit [1]; 630,000 / 360,000 = 1.75 : 1 [1] (c) Profit rises by 24,000 [1]; current assets = 720,000 − 40,000 + 64,000 = 744,000, so 744,000 / 360,000 = 2.07 : 1 [1] [6] Examiner insight: In (c), both sides of the transaction change current assets: inventory falls by cost while receivables rise by the selling price.

9. (a) Profit after tax = 5,040,000 − 720,000 − 864,000 = 3,456,000; EPS = 345,600,000 / 24,000,000 = 14.4 cents [1] Dividend cover = 3,456,000 / 2,304,000 = 1.50 times [1] Interest cover = 5,040,000 / 720,000 = 7.00 times [1] Price earnings = 216 / 14.4 = 15.0 times [1] (b) EPS rose by 20%, from 12.0 to 14.4 cents, so earnings per share are growing [1]. The yield rose to 4.44%, well above the rival’s 2.84%, which suits a dividend-seeking investor [1]. But dividend cover fell from 2.00 to 1.50 times, so the payout now takes two-thirds of profit [1]; a fall in profit could force a cut [1]. Gearing rose from 30% to 38% and interest cover fell from 9.50 to 7.00 times, so financial risk has increased [1]. The rival is safer on every risk measure, though its lower yield gives less income [1]. Price earnings rose from 14.0 to 15.0, so the market has become more confident in Glanvor [1]. Recommendation: buy Glanvor for income only if the investor accepts more risk to the dividend; otherwise the rival is the safer choice. Limitation: one year’s figures and a single share-price date [1]. [12] Examiner insight: Higher evaluation credit needs a recommendation tied to this investor’s aim (dependable dividends), supported by figures from both years and the rival.

10. (a) Budget: materials 48.00, labour 30.00 per chair [1]. Actual: materials 51.00, labour 28.00 per chair [1]. (b) The 25,700 compares actual costs for 2,300 chairs with a budget for 2,000, so part of the “overspend” is simply extra output [1]. Per chair, labour cost fell by 2.00, an improvement [1], while materials rose by 3.00 (6.25%), which needs investigating, for example price rises or wastage [1]. [5] Examiner insight: Comparisons at different output levels need adjusting; per-unit figures support the argument with evidence.

11. (a) Net annual saving = 395,000 − 35,000 = 360,000 [1] 1,260,000 / 360,000 = 3.5 years [1]; × 12 = 42 months [1] (b) Financial case: after 3.5 years profit rises by 360,000 a year, raising EPS [1]. But the saving is an estimate; higher electricity prices would lengthen payback [1]. Employees: fourteen jobs go; the eight technicians gain new skills, but morale may fall [1]. Customers may get a tougher, more consistent finish, with fewer complaints [1]. Local economy: lost wages reduce spending in the town, and the local waste contractor loses work [1]. National economy: fewer jobs mean higher benefit payments and lower income tax [1]. Environment: far fewer solvent fumes and less hazardous waste [1], though the ovens use more electricity, whose emissions depend on how it is generated [1]. Judgement: worthwhile if the cost estimates hold; retraining some painters as technicians would reduce the local impact [1]. [12] Examiner insight: Cover every area the question names; a balanced list with no final judgement limits the credit for assessment.

Where marks are usually lost

• Mixing dollars and cents when calculating price earnings or dividend yield.
• Using profit before tax instead of profit after tax for EPS and dividend cover.
• Treating a share issue or dividend payment as changing profit.
• In transaction questions, changing only one current asset when two are affected.
• Naming a stakeholder without linking it to a specific ratio or report.
• Assessing a recommendation without the local economy, national economy or environment when the question names them.
• No final recommendation, or one not linked to the evidence.

Next steps

• Revision notes
• Study guide
• OxfordAQA A-level Accounting hub
• 9615 checklist
• All free 10-minute diagnostics
• Book a free trial class

Official syllabus

OxfordAQA International AS and A-level Accounting (9615) specification, Version 1.2, for International AS exams May/June 2025 onwards and International A-level exams May/June 2026 onwards, published by OxfordAQA – section 3.2.9, Interpretation, analysis and communication of accounting information. Ratio formulae from the OxfordAQA guide Formulae for accounting ratios.