A few tips about the exam paper on Tuesday
SECTION A – Personal Finance - 28 marks
 You should spend up to 45 minutes on this section.
SECTION B – Business Finance – 52 marks
 You should spend up to 75 minutes on this section. Therefore make sure you spend
more time on section B.
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For the next three days, focus on past papers and mark scheme (uploaded on MS TEAMS)
Do use the mark scheme for the STRUCTURE particularly from 6 marks and higher (benefits
versus drawbacks, internal finance versus external finance)
Do use the mark scheme to REVISE the topics which you did some time ago.
Each formula is worth 1 mark. Do memorise your formulae.
RATIOS
CATEGORY
Profitability
1. Gross Profit Margin = GROSS PROFIT X 100
SALES REVENUE
2. Net Profit Margin = NET PROFIT
X 100
SALES REVENUE
3. Mark-Up = GROSS PROFIT
X 100
COST OF GOODS SOLD
4. Return On Capital Employed = NET PROFIT BEFORE INTEREST
AND TAX X 100
CAPTIAL EMPLOYED
Liquidity
1. Current Ratio = CURRENT ASSETS
CURRENT LIABILITIES
2. Liquid Capital Ratio (or acid test ratio) = CURRENT ASSETS INVENTORY
CURRENT LIABILITIES
1. Trade Receivable Days = TRADE RECEIVABLES x 365 (DAYS)
Efficiency
CREDIT SALES
2. Trade Payables Days = TRADE PAYABLES
x 365 (DAYS)
CREDIT PURCHASES
3. Inventory Turnover = AVERAGE INVENTORY x 365 (DAYS)
COST OF SALES
AVERAGE INVENTORY = OPENING INVENTORY + CLOSING
INVENTORY
2
CASH FLOW FORMULAE
1.
2.
3.
4.
NET CASH FLOW = CASH IN – CASH OUT
CLOSING BALANCE = OPENING BALANCE + CASH IN – CASH OUT
OPENING BALANCE = CLOSING BALANCE – NET CASH FLOW
CLOSING BALANCE OF ONE MONTH IS THE OPENING BALANCE OF THE NEXT MONTH
BREAK EVEN FORMULAE
1.
2.
3.
4.
5.
6.
7.
8.
BREAK EVEN = FIXED COSTS/CONTRIBUTION PER UNIT
CONTRIBUITON PER UNIT = PRICE – VARIABLE COST PER UNIT
TOTAL COSTS = FIXED COSTS + VARIABLE COSTS
VARIABLE COSTS = VARIABLE COST PER UNIT x SALES (QUANTITY)
TOTAL REVENUE (SALES REVENUE) = PRICE x QUANTITY (SALES)
PROFIT = TOTAL REVENUE – TOTAL COSTS
MARGIN OF SAFETY = OUTPUT – BREAKEVEN
PROFT (contribution method) = MARGIN OF SAFETY x CONTRIBUTION PER UNIT