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Financial Statement Analysis and Interpretation · CAPE Accounting Unit 1

54 past-paper questions on Financial Statement Analysis and Interpretation, part of Module 3: Financial Reporting and Interpretation, from every CAPE Accounting Unit 1 paper on Quelpr.

Practise Financial Statement Analysis and Interpretation
  1. 3(c)6 marks· CAPE Accounting Unit 1 · 2006 · Paper 2Briefly discuss THREE limitations of financial statements as a source of information for assessing the financial condition and performance of a company.
  2. 3(b)15 marks· CAPE Accounting Unit 1 · 2007 · Paper 2Write a report to Tom informing him of the performance of the company from an investor's perspective, addressing FOUR key aspects: liquidity, activity, solvency, and profitability.
  3. 3(b)(i)2 marks· CAPE Accounting Unit 1 · 2008 · Paper 2Calculate the Current ratio for Maraval Company for 2007.
  4. 3(b)(ii)2 marks· CAPE Accounting Unit 1 · 2008 · Paper 2Calculate the Acid test ratio for Maraval Company for 2007.
  5. 3(b)(iii)2 marks· CAPE Accounting Unit 1 · 2008 · Paper 2Calculate the Net income per cent for Maraval Company for 2007.
  6. 3(b)(iv)2 marks· CAPE Accounting Unit 1 · 2008 · Paper 2Calculate the Return on total assets for Maraval Company for 2007.
  7. 3(b)(v)2 marks· CAPE Accounting Unit 1 · 2008 · Paper 2Calculate the Debt to equity ratio for Maraval Company for 2007.
  8. 3(b)(i)4 marks· CAPE Accounting Unit 1 · 2009 · Paper 2State TWO uses and TWO limitations of financial ratios.
  9. 3(b)(ii)8 marks· CAPE Accounting Unit 1 · 2009 · Paper 2Discuss the performance of Cheryl's Salon over 2007 and 2008 in terms of liquidity and profitability using the industry averages as benchmarks.
  10. 3(b)10 marks· CAPE Accounting Unit 1 · 2010 · Paper 2Calculate TWO liquidity ratios and THREE profitability ratios for the company and comment on the performance.
  11. 3(c)5 marks· CAPE Accounting Unit 1 · 2010 · Paper 2List FIVE limitations of financial statement ratio analysis.
  12. 3(a)(i)2 marks· CAPE Accounting Unit 1 · 2011 · Paper 2Compute the current ratio for both companies.
  13. 3(a)(ii)2 marks· CAPE Accounting Unit 1 · 2011 · Paper 2Compute the acid-test (quick) ratio for both companies.
  14. 3(a)(iii)4 marks· CAPE Accounting Unit 1 · 2011 · Paper 2Compute the accounts receivable collection period for both companies.
  15. 3(a)(iv)2 marks· CAPE Accounting Unit 1 · 2011 · Paper 2Compute the inventory turnover ratio for both companies.
  16. 3(a)(v)2 marks· CAPE Accounting Unit 1 · 2011 · Paper 2Compute the debt to total assets ratio for both companies.
  17. 3(a)(vi)2 marks· CAPE Accounting Unit 1 · 2011 · Paper 2Compute the debt to equity ratio for both companies.
  18. 3(a)(vii)3 marks· CAPE Accounting Unit 1 · 2011 · Paper 2Compute the times interest earned ratio for both companies.
  19. 3(b)6 marks· CAPE Accounting Unit 1 · 2011 · Paper 2Prepare a report for the bank outlining the performance of EACH company in terms of liquidity and solvency.
  20. 3(c)2 marks· CAPE Accounting Unit 1 · 2011 · Paper 2Indicate which of the two companies should receive the loan AND give ONE reason why it should.
  21. 3(b)(i)3 marks· CAPE Accounting Unit 1 · 2013 · Paper 2Calculate the Current ratio for the year ended 31 December 2011 and interpret your answer.
  22. 3(b)(ii)3 marks· CAPE Accounting Unit 1 · 2013 · Paper 2Calculate the Quick ratio for the year ended 31 December 2011 and interpret your answer.
  23. 3(b)(iii)3 marks· CAPE Accounting Unit 1 · 2013 · Paper 2Calculate the ratio Debt / Total Assets for the year ended 31 December 2011 and interpret your answer.
  24. 3(b)(iv)3 marks· CAPE Accounting Unit 1 · 2013 · Paper 2Calculate the ratio Debt / Equity for the year ended 31 December 2011 and interpret your answer.
  25. 3(b)(v)3 marks· CAPE Accounting Unit 1 · 2013 · Paper 2Calculate the ratio Net Income / Total Assets for the year ended 31 December 2011 and interpret your answer.
  26. 3(d)3 marks· CAPE Accounting Unit 1 · 2014 · Paper 2State THREE limitations of accounting ratios.
  27. 3(e)(i)2 marks· CAPE Accounting Unit 1 · 2014 · Paper 2Calculate the Gross profit margin and state ONE meaning of your result.
  28. 3(e)(ii)2 marks· CAPE Accounting Unit 1 · 2014 · Paper 2Calculate the Times interest earned and state ONE meaning of your result.
  29. 3(e)(iii)2 marks· CAPE Accounting Unit 1 · 2014 · Paper 2Calculate the Earnings per share and state ONE meaning of your result.
  30. 3(e)(iv)2 marks· CAPE Accounting Unit 1 · 2014 · Paper 2Calculate the Price earnings ratio and state ONE meaning of your result.
  31. 3(e)(v)2 marks· CAPE Accounting Unit 1 · 2014 · Paper 2Calculate the Dividend payout and state ONE meaning of your result.
  32. 3(a)14 marks· CAPE Accounting Unit 1 · 2015 · Paper 2Prepare common size statements for Siscco Ltd. From these, prepare a report to analyse the performance of the company, focusing on liquidity and profitability by using at least TWO ratios in EACH category. Calculate…
  33. 3(b)3 marks· CAPE Accounting Unit 1 · 2015 · Paper 2List THREE limitations of ratio analysis.
  34. 1(b)(ii)4 marks· CAPE Accounting Unit 1 · 2016 · Paper 2State FOUR reasons why financial statements do not provide users with all the information they need.
  35. 3(a)(i)2 marks· CAPE Accounting Unit 1 · 2017 · Paper 2Calculate the Net income percentage for 2015 and 2016.
  36. 3(a)(ii)2 marks· CAPE Accounting Unit 1 · 2017 · Paper 2Calculate the Inventory turnover ratio for 2015 and 2016.
  37. 3(a)(iii)2 marks· CAPE Accounting Unit 1 · 2017 · Paper 2Calculate the Quick ratio for 2015 and 2016.
  38. 3(a)(iv)2 marks· CAPE Accounting Unit 1 · 2017 · Paper 2Calculate the Earnings per share for 2015 and 2016.
  39. 3(a)(v)2 marks· CAPE Accounting Unit 1 · 2017 · Paper 2Calculate the Debt to equity ratio for 2015 and 2016.
  40. 3(b)(i)6 marks· CAPE Accounting Unit 1 · 2017 · Paper 2Define any TWO of the ratios in (a) AND use EACH ratio defined to comment on the performance of the company over the two-year period.
  41. 3(b)(ii)2 marks· CAPE Accounting Unit 1 · 2017 · Paper 2List TWO limitations of using ratios to evaluate the performance of the company.
  42. 1(a)(ii)6 marks· CAPE Accounting Unit 1 · 2018 · Paper 2Explain each of the specified limitations of financial statements: - Use of accounting policies [3 marks] - Use of estimates and aggregation [3 marks]
  43. 3(c)(i)2 marks· CAPE Accounting Unit 1 · 2018 · Paper 2Calculate the Dividend payout ratio for Castries Corporation for the year 2017.
  44. 3(c)(ii)4 marks· CAPE Accounting Unit 1 · 2018 · Paper 2Calculate the Price earnings ratio for Castries Corporation for the year 2017.
  45. 3(c)(iii)3 marks· CAPE Accounting Unit 1 · 2018 · Paper 2Calculate the Average collection period for Castries Corporation for the year 2017.
  46. 3(c)(iv)3 marks· CAPE Accounting Unit 1 · 2018 · Paper 2Calculate the Average payment period for Castries Corporation for the year 2017.
  47. 3(c)(v)3 marks· CAPE Accounting Unit 1 · 2018 · Paper 2Calculate the Debt-to-equity ratio for Castries Corporation for the year 2017.
  48. 3(c)(vi)3 marks· CAPE Accounting Unit 1 · 2018 · Paper 2Calculate the Interest coverage ratio for Castries Corporation for the year 2017.
  49. 3(a)(i)2 marks· CAPE Accounting Unit 1 · 2019 · Paper 2Calculate the acid-test ratio for 2017.
  50. 3(a)(ii)2 marks· CAPE Accounting Unit 1 · 2019 · Paper 2Calculate the gross profit margin for 2017.
  51. 3(a)(iii)2 marks· CAPE Accounting Unit 1 · 2019 · Paper 2Calculate the net income margin for 2017.
  52. 3(b)(i)6 marks· CAPE Accounting Unit 1 · 2019 · Paper 2Assess the performance of Rainbow Corp for 2017 in terms of inventory turnover.
  53. 3(b)(ii)6 marks· CAPE Accounting Unit 1 · 2019 · Paper 2Assess the performance of Rainbow Corp for 2017 in terms of average collection period.
  54. 3(c)4 marks· CAPE Accounting Unit 1 · 2019 · Paper 2Distinguish between 'solvency analysis' and 'profitability analysis', giving TWO examples of a ratio used in EACH analysis.

Related topics in Module 3: Financial Reporting and Interpretation