OxfordAQA IGCSE Accounting: Appraising business performance, cash and profit (9215) – 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 are aligned to the OxfordAQA International GCSE Accounting (9215) specification, version 1.2, for exams from May/June 2026 onwards. They cover the part of section 3.5 on ratios, appraising business performance, and cash versus profit. Learn the content from the study guide and the revision notes. Use 365 days in a year. All amounts are in dollars. Give percentages and days to one decimal place and ratios to two decimal places, unless exact.

Questions

1. Brackenholm Cafe has revenue of 250,000 and cost of sales of 175,000. Calculate (a) the gross profit margin and (b) the markup. [4]

2. Mirren Cycles has cost of sales of 160,000, opening inventory of 18,000 and closing inventory of 22,000. Calculate the rate of inventory turnover and state what the result shows. [3]

3. Carrick Stationers has trade receivables of 36,000, credit sales of 292,000, trade payables of 21,000 and credit purchases of 210,000. Calculate the trade receivable days and trade payable days, and comment on the difference. [5]

4. Hollinwray Garden Centre has inventory 30,000, trade receivables 14,000 and bank 6,000. Its current liabilities are trade payables 21,000 and accrued expenses 4,000. Calculate the current ratio and liquid capital ratio, and comment. [5]

5. Marchmont Bakery has revenue 380,000, gross profit 152,000, profit for the year 38,000 (there is no loan interest, so this is also the profit from operations) and capital employed 190,000. Calculate the gross profit margin, profit in relation to revenue and return on capital employed. [4]

6. For each transaction, state the effect on profit and on cash (increase, decrease or no effect). Each part is separate.

(a) The business buys a delivery van with a bank payment of 12,000. [2] (b) It sells goods on credit for 9,000, which cost 6,000. [2] (c) It records a depreciation charge on equipment. [2] (d) The owner pays extra capital into the business bank account. [2]

7. Explain the difference between cash and profit. Use an example in your answer. [4]

8. Eastlake Pottery’s results for two years are below. Capital employed was 240,000 in 2025 and 255,000 in 2026.

	2025	2026
Revenue	300,000	330,000
Cost of sales	180,000	214,500
Expenses	84,000	82,500

Calculate for both years the gross profit margin, profit in relation to revenue and return on capital employed. Then appraise the profitability of the business. [9]

9. Furzedown Tiles has the following information.

	2025	2026
Inventory	40,000	66,000
Trade receivables	30,000	41,000
Bank	20,000	3,000
Trade payables	45,000	58,000
Accrued expenses	0	4,000
Credit sales	292,000	365,000

Calculate the current ratio and liquid capital ratio for both years, and the trade receivable days for both years. Comment on the liquidity of the business and make one recommendation. [8]

10. Ketteridge Books has inventory 24,000, trade receivables 16,000, bank 8,000 and trade payables 24,000. Treat each transaction separately.

(a) Calculate the current ratio after the business pays 6,000 of trade payables from the bank. [2] (b) Calculate the current ratio after it buys 8,000 of inventory on credit. [2] (c) Comment on what the change in (a) shows about cash and the ratio. [2]

11. Padgett Joinery made a profit for the year of 48,000. The bank balance at the start of the year was 6,000 in credit. During the year the following happened: depreciation charged was 10,000, inventory rose by 14,000, trade receivables rose by 9,000, trade payables rose by 5,000, non-current assets costing 22,000 were bought for cash and the owner took drawings of 30,000.

(a) Calculate the bank balance at the end of the year. [7] (b) Explain why a profit of 48,000 was followed by a fall in the bank balance. [3]

Answers

1. (a) Gross profit = 250,000 - 175,000 = 75,000 [1]. Margin = 75,000 / 250,000 x 100 = 30.0% [1]. (b) Markup = 75,000 / 175,000 x 100 [1] = 42.9% [1]. [4] Examiner insight: Answers that show the formula and the gross profit figure make the method visible. The usual slip is dividing by revenue in part (b).

2. Average inventory = (18,000 + 22,000) / 2 = 20,000 [1]. Turnover = 160,000 / 20,000 = 8 times [1]. The business sells and replaces its inventory 8 times a year [1]. [3] Examiner insight: A bare number leaves the final mark out of reach. Say what “times” refers to, which is how often inventory is sold and replaced in the year.

3. Receivable days = 36,000 / 292,000 x 365 = 45.0 days [2]. Payable days = 21,000 / 210,000 x 365 = 36.5 days [2]. The business takes longer to collect from customers than it takes to pay suppliers, so it must fund the gap from its own cash [1]. [5] Examiner insight: Use credit sales and credit purchases as the question gives them. Comments gain credit when they say what the gap means for cash, not just that one number is larger.

4. Current assets = 30,000 + 14,000 + 6,000 = 50,000 [1]. Current liabilities = 21,000 + 4,000 = 25,000, so the current ratio is 2.00 : 1 [1]. Liquid assets = 50,000 - 30,000 = 20,000 [1]. Liquid capital ratio = 20,000 : 25,000 = 0.80 : 1 [1]. Comment: the liquid capital ratio is below 1, so without selling inventory the business could not cover all its current liabilities [1]. [5] Examiner insight: Do not forget accrued expenses, which are current liabilities. Comments score better when they refer to the figure of 1 as a benchmark and to inventory.

5. Gross profit margin = 152,000 / 380,000 x 100 = 40.0% [1]. Profit in relation to revenue = 38,000 / 380,000 x 100 = 10.0% [1]. ROCE = 38,000 / 190,000 x 100 = 20.0% [1]. Formulas shown and a correct unit on every answer [1]. [4] Examiner insight: Three similar-looking percentages are easy to mix up. Labelling each answer, with its formula, helps a marker follow your work even if one figure is wrong.

6. (a) Profit: no effect [1]. Cash: decrease [1]. (b) Profit: increase by 3,000 [1]. Cash: no effect, because the customer has not yet paid [1]. (c) Profit: decrease [1]. Cash: no effect, because depreciation is not a payment [1]. (d) Profit: no effect, because capital is not income [1]. Cash: increase [1]. [8] Examiner insight: Each effect needs a separate statement. A short reason makes a correct answer more secure, especially for credit sales and depreciation.

7. Profit is revenue less expenses for a period, with sales and costs recorded when they arise, not when money moves [1]. Cash is money actually received and paid [1]. For example, a credit sale increases profit immediately, but cash increases only when the customer pays [1]. Depreciation reduces profit but no cash leaves the business [1]. [4] Examiner insight: A definition of each term and a worked example earn separate credit. A single example that shows profit and cash moving differently is stronger than two definitions alone.

8. 2025: gross profit 120,000, margin 40.0% [1]; profit 120,000 - 84,000 = 36,000, so profit in relation to revenue 12.0% [1]; ROCE 36,000 / 240,000 = 15.0% [1]. 2026: gross profit 330,000 - 214,500 = 115,500, margin 35.0% [1]; profit 115,500 - 82,500 = 33,000, so 10.0% [1]; ROCE 33,000 / 255,000 = 12.9% [1]. Appraisal: revenue rose by 10% but gross profit margin fell by 5 percentage points, suggesting lower selling prices or higher costs [1]. Expenses fell slightly, but profit still fell from 36,000 to 33,000, and profit in relation to revenue fell [1]. ROCE fell too, so profitability weakened despite higher sales [1]. [9] Examiner insight: Calculations alone cannot earn the appraisal marks. Comparing the two years, giving a plausible reason and reaching a judgement all gain credit.

9. 2025: current assets 90,000, current liabilities 45,000, current ratio 2.00 : 1 [1]; liquid ratio 50,000 : 45,000 = 1.11 : 1 [1]. 2026: current assets 110,000, current liabilities 62,000, current ratio 1.77 : 1 [1]; liquid ratio 44,000 : 62,000 = 0.71 : 1 [1]. Receivable days 2025: 30,000 / 292,000 x 365 = 37.5 days [1]; 2026: 41,000 / 365,000 x 365 = 41.0 days [1]. Comment: liquidity worsened, the liquid ratio fell below 1 and bank fell to 3,000, while inventory grew [1]. Recommendation: for example, reduce inventory or collect from customers sooner to improve cash [1]. [8] Examiner insight: A recommendation gains credit when it follows from the figures. “Improve liquidity” alone is too vague, so name an action and the reason for it.

10. (a) Current assets fall to 48,000 - 6,000 = 42,000 and current liabilities to 18,000 [1]. Current ratio = 2.33 : 1 [1]. (b) Current assets rise to 56,000 and current liabilities to 32,000 [1]. Current ratio = 1.75 : 1 [1]. (c) The ratio improved in (a) although cash fell by 6,000 [1]. The ratio compares current assets with current liabilities and does not show how much cash is held [1]. [6] Examiner insight: Calculate each transaction from the original figures, not from the result of the previous part. Separate working for current assets and current liabilities makes the method clear.

11. (a) Profit plus depreciation = 48,000 + 10,000 = 58,000 [1]. Less inventory increase 14,000 [1]. Less receivables increase 9,000 [1]. Add payables increase 5,000, giving 40,000 from trading [1]. Less non-current assets 22,000 [1]. Less drawings 30,000, a fall of 12,000 in total [1]. Closing bank = 6,000 - 12,000 = overdraft of 6,000 [1]. (b) Profit was tied up in more inventory and receivables [1]. Cash was spent on non-current assets [1]. The owner drew out 30,000, which reduces cash but is not an expense [1]. [10] Examiner insight: Depreciation needs adding back because it reduced profit without a payment. Say which items are increases in assets, since they use cash, and which are increases in liabilities, since they hold cash back.

Where marks are usually lost

• Writing an answer with no formula, so a slip cannot be traced to a correct method.
• Omitting units: %, times, days or x : 1.
• Using revenue instead of credit sales for receivable days.
• Calculating markup on revenue and margin on cost of sales.
• Forgetting accrued expenses or an overdraft when working out current liabilities.
• Commenting without comparing, explaining or judging.
• Treating depreciation or drawings as if they changed cash and profit in the same way.
• Saying a higher current ratio always means more cash.

Next steps

• Re-read the revision notes and the study guide
• Visit the course hub and the checklist
• Take the free 10-minute diagnostics
• Book a free trial class

Frequently asked questions

Where do students usually lose marks on appraising performance questions? Common losses are giving an answer with no formula, omitting units, using revenue instead of credit sales for receivable days, and commenting on a ratio without comparing, explaining or judging.

What should I remember when working out current liabilities for a ratio? Include every current liability, such as accrued expenses and a bank overdraft. Forgetting them makes the current and liquid capital ratios too high.

Does a higher current ratio always mean more cash? No. Saying a higher current ratio always means more cash is a common mistake, because the ratio can rise from extra inventory or receivables rather than cash.

Which units should ratio answers in OxfordAQA International GCSE Accounting 9215 use? Give margins and ROCE as percentages, inventory turnover in times, receivable and payable days in days, and the current and liquid capital ratios as x : 1.

Official syllabus

Source: OxfordAQA International GCSE Accounting (9215) specification, version 1.2, for exams from May/June 2026 onwards, published by OxfordAQA, section 3.5.