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1 markFinancial Ratio Analysis

CSEC Principles of Accounts · May/June 2011 · Paper 2 · Question 7(b)(ii)

Comparative financial ratios between Cartel Vee and a competitor are given.

Which of the ratios above measures a firm's ability to meet its short-term debts?

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Other parts of this question

  1. 7(a)(i)Calculate the amount of units held as unsold stock at year end.[3 marks]
  2. 7(a)(ii)Calculate the value of closing stock using the: a) FIFO method, b) LIFO method.[2 marks]
  3. 7(a)(iii)Calculate the Gross Profit for Cartel Vee using the LIFO value for closing stock.[5 marks]
  4. 7(a)(iv)State the MAIN reason why it is necessary to know the stock valuation method being used by a firm.[1 mark]
  5. 7(a)(v)Calculate the cost price that would be used for the AVCO method in valuing closing stock.[4 marks]
  6. 7(a)(vi)What ratio can be calculated to measure how quickly Cartel Vee sells his stock?[1 mark]
  7. 7(b)(i)Which of the ratios above measures control of costs?[1 mark]
  8. 7(b)(iii)Prepare a short report, using both ratios, comparing Cartel Vee's performance with that of his competitor.[2 marks]

More practice: the rest of this paper · more Financial Ratio Analysis questions · all CSEC Principles of Accounts past papers