Analysis and interpretation: past paper questions
Real questions on analysis and interpretation
The newest 20 of 33 written questions, plus 72 multiple-choice. Open one to see it on the real paper.
- 0985/22 · May/June 2026 · Q2c(i)[2]
gross margin
See it on the paper → - 0985/22 · May/June 2026 · Q2c(ii)[3]
rate of inventory turnover (times)
See it on the paper → - 0985/22 · May/June 2026 · Q4c(ii)[1]
capital employed
See it on the paper → - 0985/22 · May/June 2026 · Q4c(iii)[3]
return on capital employed (based on closing capital), to two decimal places. The directors are considering issuing ordinary shares and using the funds to purchase new shop fixtures. The shop fixtures would include a large new sign showing the name of the company for the front of the shop. REQUIRED
See it on the paper → - 0985/22 · October/November 2025 · Q3e[5]
Advise Ahmed whether he should buy this new recovery vehicle. Justify your answer by providing advantages and disadvantages of buying the new recovery vehicle.
See it on the paper → - 0985/22 · October/November 2025 · Q4a[10]
Complete the following table by indicating whether the ratio has improved or deteriorated at the end of year 2, and give two reasons which may have caused the change. The Return on capital employed (ROCE) has been completed as an example. Ratio Return on capital employed (ROCE) Improved or deteriorated Deteriorated Pos...
See it on the paper → - 0985/22 · October/November 2025 · Q4d[5]
Advise the directors of AY Limited whether or not delaying payments to their trade payables would be a good way to secure the purchase of the equipment. Justify your answer by providing points for and against delaying payments to their trade payables.
See it on the paper → - 0985/21 · May/June 2025 · Q2f(i)[1]
Mo’s gross margin is higher than Barry’s
See it on the paper → - 0985/21 · May/June 2025 · Q2f(ii)[1]
Mo’s expenses are lower than Barry’s.
See it on the paper → - 0985/21 · May/June 2025 · Q4d[3]
The directors of H Limited would like to expand the business. They are considering issuing debentures for $60 000 to fund an expansion. These debentures would carry interest of 3%. REQUIRED (d) Calculate the return on capital employed for the year ended 30 April 2025. State your answer to two decimal places.
See it on the paper → - 0985/21 · May/June 2025 · Q4e[5]
Advise the directors whether or not they should issue the debentures to fund an expansion. Justify your answer by providing two points for and two points against issuing the debentures to fund an expansion. Question 5 starts on page 16.
See it on the paper → - 0985/21 · May/June 2025 · Q5d[5]
Advise Grace whether or not she should start producing handbags in her factory. Justify your answer with points for and against Grace producing handbags in her factory.
See it on the paper → - 0985/21 · May/June 2024 · Q3d[5]
Advise Zahra and Panya whether or not they should go ahead with the 100% increase in the amount spent on advertising. Justify your answer by providing two points in favour and two points against this increase.
See it on the paper → - 0985/22 · May/June 2024 · Q2d[5]
Advise Toyah whether or not she should buy Idir’s inventory. Justify your answer by providing two points for and two points against buying this inventory.
See it on the paper → - 0985/22 · May/June 2024 · Q5a[11]
Complete the following table. ratio working answer Gross margin (to 2 decimal places) Profit margin (to 2 decimal places) Rate of inventory turnover (times) (to 2 decimal places) Trade receivables turnover days (round up to next whole day) Liquid (acid test) ratio (to 2 decimal places) Ajay has been trading for 3 years...
See it on the paper → - 0985/22 · May/June 2024 · Q5b(i)[1]
Suggest one reason why Ajay’s gross margin has increased.
See it on the paper → - 0985/22 · May/June 2024 · Q5b(ii)[1]
State one reason why Ajay’s customers might be interested in his financial statements. Ajay is concerned about the levels of his inventory and trade receivables. He is considering reducing his selling price. REQUIRED
See it on the paper → - 0985/22 · May/June 2024 · Q5c[5]
Advise Ajay whether or not he should reduce his selling price. Justify your answer by providing advantages and disadvantages of reducing his selling price. Although Ajay’s gross margin has increased, his profit margin has fallen for each of the last two years. Sales revenue is Ajay’s only income. REQUIRED
See it on the paper → - 0985/22 · May/June 2024 · Q5d[2]
State two reasons why Ajay should be concerned about his falling profit margin.
See it on the paper → - 0985/22 · October/November 2023 · Q2d[5]
Advise Sara whether she should start supplying the drama school with costumes. Justify your answer by providing advantages and disadvantages of supplying the costumes.
See it on the paper →
What examiners said
The decision to supply a drama school with costumes at the cost of an increased credit payment period was an opportunity to gain several marks for the majority of candidates. Advantages were identified regularly but disadvantages were too focused upon irrecoverable debts instead of the risk of irrecoverable debts and the potential to impact upon liquidity. Many answers referred to income throughou...
— Examiner report, October/November 2023, 0985/22 Q2(d) (Cambridge)
This question has been highlighted in the ‘key messages’ section with the need to highlight that increased trade discount would be offered to regular customers only. A general discussion on the impact on gross profit was not identified or too often only profit was mentioned incorrectly. ‘Bulk buying’ and ‘new customers would increase’ did not necessarily follow and featured in many answers. Cash d...
— Examiner report, October/November 2023, 0985/22 Q3(d) (Cambridge)
The question is a very frequent business scenario. Should the business take out a five-year loan to finance its future expansion? This was usually well answered by most candidates with reasonable time allowing the loan to be repaid and leading to increased profits being popular answers. Common points against taking out a loan centred upon interest charges being incurred and the need to supply some...
— Examiner report, October/November 2023, 0985/22 Q5(c) (Cambridge)
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