IGCSE Business Studies 0450 · Topic 5

Financial information and decisions: past paper questions

194 real questionsasked in 10 of the last 10 exam series2019–2026usually: Explain, Calculate, Define, Justify, Identify

Real questions on financial information and decisions

The newest 20 of 194 written questions. Open one to see it on the real paper.

0450/11 · May/June 2026 · Q2a[2]
Define ‘non-current assets’.
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0450/11 · May/June 2026 · Q2b[2]
Calculate OBZ’s working capital. Show your working. working capital
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0450/11 · May/June 2026 · Q2c[4]
Outline two reasons why OBZ needs to manage its cash. reason reason
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0450/12 · May/June 2026 · Q3a[2]
Calculate BTV’s current ratio. Show your working. current ratio
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0450/12 · May/June 2026 · Q3e[6]
Explain two reasons why profit might be important to a business. Which reason is likely to be the most important? Justify your answer.
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0450/13 · May/June 2026 · Q1a[2]
Identify two cash inflows a business might have. cash inflow cash inflow
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0450/13 · May/June 2026 · Q1d[6]
Explain two ways George could use MCL’s cash flow forecast. way explanation way explanation
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0450/12 · February/March 2026 · Q3d[6]
Explain two external sources of finance KYX could use to fund the new factory. source explanation source explanation
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0450/11 · October/November 2025 · Q2b[2]
Identify one non-current asset and one current liability. Non-current asset: Current liability:
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0450/11 · October/November 2025 · Q2c[4]
Outline two ways the information in Table 2.1 might be useful to CPW. Way 1: Way 2:
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0450/12 · October/November 2025 · Q2a[2]
Define ‘cash flow forecast’.
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0450/12 · October/November 2025 · Q2b[2]
Identify two reasons why cash is important for a business. Reason 1: Reason 2:
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0450/12 · October/November 2025 · Q2d[6]
Explain two ways OTK could overcome a short-term cash flow problem. Way 1: Explanation: Way 2: Explanation:
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0450/13 · October/November 2025 · Q1b[2]
Calculate KPX’s expenses in 2024. Show your working. Working: Final
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0450/13 · October/November 2025 · Q1c[4]
Outline two ways KPX’s Finance Director could use the financial data in Table 1.1. Way 1: Way 2:
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0450/13 · October/November 2025 · Q1e[6]
Explain two reasons why profit is important for a business. Which reason is likely to be the most important? Justify your answer.
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0450/23 · October/November 2025 · Q4a[8]
Explain one way each of the following ES stakeholder groups might find the financial information in Appendix 3 useful. Owners: Employees: Suppliers: Bank:
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0450/11 · May/June 2025 · Q3c[4]
Identify four reasons why a cash flow forecast might be useful to a business. Reason 1: Reason 2: Reason 3: Reason 4:
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0450/11 · May/June 2025 · Q4e[6]
Do you think the advantages of using retained profits to fund business expansion are greater than the disadvantages? Justify your answer.
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0450/12 · May/June 2025 · Q2a[2]
Define ‘profit’.
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What examiners said

Comprehensive responses • Good knowledge of sources of finance was shown by these candidates. They were then able to explain how sources such as bank loan could raise a large amount or how issuing shares involved no repayment. • Such responses gained application for recognising this was a public limited company and/or that it made beds. Limited responses • Some candidates identified internal sour...
— Examiner report, February/March 2026, 0450/12 Q3(d) (Cambridge)

Candidates found this to be the most challenging part (c) question on the examination paper. The strongest answers recognised the importance of a cashflow forecast for planning and in loan applications. A common error made by many candidates was to state that the cashflow forecast would help to calculate profit or loss. Some candidates had clearly confused a cashflow forecast with an income statem...
— Examiner report, May/June 2025, 0450/11 Q3(c) (Cambridge)

Many candidates did not fully understand this topic area. A noticeable number of candidates did not answer this question. The strongest answers recognised that a lack of profit may lead to a delay in expansion but had the advantage of not needing to be repaid. Even the strongest candidates struggled to produce an evaluative answer to this question. Weaker answers confused profit with cashflow and...
— Examiner report, May/June 2025, 0450/11 Q4(e) (Cambridge)

Practise this topic

Answer these questions online and get each one marked against the official mark scheme, with what you missed and how to fix it.

Practise financial information and decisions

In the syllabus

1 The need for business finance: • The main reasons why businesses need

Understand the difference between short-term and long-term finance needs

2 0450.5.1.2.01 — Short-term and long-term sources with examples, e.g. overdraft for short-term finance and debt or equity for long-term finance

Short-term and long-term sources with examples, e.g. overdraft for short-term finance and debt or equity for long-term finance
Importance of alternative sources of capital, e.g. micro-finance, crowd-funding
The main factors considered in making the financial choice, e.g. size and legal form of business, amount required, length of time, existing loans
Recommend and justify appropriate source(s) of finance in given circumstances

3 0450.5.1.2.02 — Importance of alternative sources of capital, e.g. micro-finance, crowd-funding

Importance of alternative sources of capital, e.g. micro-finance, crowd-funding

4 0450.5.1.2.03 — The main factors considered in making the financial choice, e.g. size and legal form of business, amount required, length of time, existing

The main factors considered in making the financial choice, e.g. size and legal form of business, amount required, length of time, existing loans

5 0450.5.1.2.04 — Recommend and justify appropriate source(s) of finance in given circumstances

Recommend and justify appropriate source(s) of finance in given circumstances

6 0450.5.2.1.01 — Amend or complete a simple cash-flow forecast

Amend or complete a simple cash-flow forecast
How to interpret a simple cash-flow forecast
How a short-term cash-flow problem might be overcome, e.g. overdraft, delaying supplier payments, asking debtors to pay more quickly

7 0450.5.2.1.02 — How to interpret a simple cash-flow forecast

How to interpret a simple cash-flow forecast

8 0450.5.2.1.03 — How a short-term cash-flow problem might be overcome, e.g. overdraft, delaying supplier payments, asking debtors to pay more quickly

How a short-term cash-flow problem might be overcome, e.g. overdraft, delaying supplier payments, asking debtors to pay more quickly

9 0450.5.3.1.01 — Importance of profit to private sector businesses, e.g. reward for risk-taking/ enterprise, source of finance

Importance of profit to private sector businesses, e.g. reward for risk-taking/ enterprise, source of finance
Difference between profit and cash

10 0450.5.3.1.02 — Difference between profit and cash

Difference between profit and cash

11 Income statements: • Main features of an income statement,

Use simple income statements in decision- making based on profit calculations (constructing income statements will not be assessed)

12 0450.5.5.3.01 — Return on Capital Employed

Return on Capital Employed
Current ratio
Acid test ratio

13 0450.5.5.3.02 — Current ratio

Current ratio

14 0450.5.5.3.03 — Acid test ratio

Acid test ratio

15 Why and how accounts are used: • Needs of different users of accounts and ratio

How users of accounts and ratio results might use information to help make decisions, e.g. whether to lend to or invest in the business

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