SQA Higher Accounting Analysing Accounting Information overview quiz quiz

(Gross profit / sales) x 100

(Profit for the year / sales) x 100

(Gross profit / capital employed) x 100

(Sales / gross profit) x 100

Current assets / current liabilities

(Profit for the year / capital employed) x 100

Cost of sales / average inventory

(Gross profit / sales) x 100

It adds inventory to current assets

It uses capital employed instead of current liabilities

It excludes inventory from current assets

It multiplies the result by 365

Inventory is overvalued

The business is making a loss

Capital employed is too low

Stock is selling quickly, tying up less cash

A large part of current assets is tied up in inventory

The business has no current liabilities

The business is highly profitable

Trade receivables are being collected too quickly

Profitability ratios

Liquidity ratios

Efficiency ratios

Tax ratios

(Credit sales / trade receivables) x 365

Trade receivables / capital employed

(Trade receivables / credit sales) x 365

Cost of sales / trade receivables

Ratios are always exactly accurate predictions of the future

Ratios remove the need to read the financial statements

Ratios can only be calculated by an auditor

Ratios are based on historical information and ignore non-financial factors

They may use different accounting policies, such as different depreciation methods

Ratios cannot be calculated for more than one business

Larger businesses are not allowed to publish ratios

Ratios always increase every year

Typing the answer as a fixed number

A formula or function such as SUM

Changing the font colour

Printing the worksheet

To delete the original cell

To change the value each time it is copied

To keep the formula pointing to the same fixed cell, such as a rate

To convert the cell to text

Memorising definitions only

Writing the longest possible answer

Avoiding the use of spreadsheets

Accurate preparation, correct layouts and clear presentation of a practical task