CIE IGCSE Topical Past Paper 1

5.5 Analysis of accounts

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045/12/M/J/2024

GTB is a business which operates in the tertiary sector. It owns 5 cafés selling food and drinks. The business uses social media as its method of promotion. The Finance Manager, Moeen, is analysing GTB’s financial statements. An extract is shown in Table 2.1. He is considering ways to improve GTB’s profit margin. Moeen knows there are other users that are interested in the accounts of a business.

Extract from GTB’s financial statements 2023
Revenue
$600 000
Profit
$150 000
Capital employed
$750 000
Profit margin
25%
Table 2.1

(b) Calculate GTB’s Return on Capital Employed (ROCE). Show your working. [4]
Working:
Final answer:

(c) Outline two ways GTB could improve its profit margin. [4]
Way 1:
Way 2:

(e) Do you think banks are the main external users of the accounts of a business? Justify your answer. [6]