CAIE IGCSE Business 0264 - Paper 2

5.5 Analysis of accounts

Topical Past-Paper Questions

Why it’s here: Profitability and liquidity ratios and their use by stakeholders.

CAIE IGCSE Business 0264 Paper 2 Topic 5.5

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Key concepts to revise

The main ideas to know for 5.5 Analysis of accounts.

Profitability ratios

Gross and profit margins compare profit with revenue.

Liquidity ratios

Current and acid-test ratios assess ability to meet short-term debts.

Trend analysis

Ratios become more useful when compared over time or with competitors.

Limitations

Accounts are historic and ratios do not explain every cause of performance.

About this topic

Analysis of accounts includes selected 0450 questions that continue to align with the Cambridge IGCSE Business 0264 syllabus.

Keep every answer connected to the business in the case study.

Use the case-study evidence
Develop each explanation fully
Show working for calculations
Justify the final recommendation

Before you begin

1Read the command word
2Check the marks available
3Study every table or figure
4Apply the answer to the business

Exam material

Past-paper questions

Past-paper question 0450/21/M/J/25 [12] marks

4(b) Using Appendix 3 and other information, consider PF’s financial position in 2025 and forecast financial position in 2026. Do you think Philip’s sister should invest in PF? Justify your answer using suitable calculations. [12] [Click here for the Case Study Insert] 2025: 2026 (forecast): Recommendation:

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