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Accounting for AQA: Part 1: Chapter 18

Page 1 of 2 - There are 10 questions in total.


Question 1 Introduction

The current ratio (also known as the working capital ratio, which assesses the liquidity of a business, is calculated by dividing current assets by current liabilities.

Question 1

The main function of ratio analysis in accounting is to assess the profitability, liquidity efficiency and capital structure of a business.

Question 2

Gross profit percentage is calculated by dividing gross profit by cost of sales and multiplying by 100.

Question 3

Profit in relation to revenue, which measures profitability after the deduction of expenses, is calculated by dividing profit before tax by revenue and multiplying by 100.

Question 4

For a sole trader return on capital employed as a percentage is calculated by dividing gross profit by capital employed and multiplying by 100.

Question 5

The current ratio (also known as the working capital ratio, which assesses the liquidity of a business, is calculated by dividing current assets by current liabilities.
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