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SingaporeAccountingQuick questions
Financial Statement Analysis and Ratios
Quick questions on Efficiency and working capital explained: O-Level Principles of Accounts
5short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What is inventory turnover?Show answer
This shows how many times a year the business sells and replaces its inventory:
What is working capital management?Show answer
These ratios together describe how well the business manages its working capital (current assets less current liabilities). Ideally, a business sells stock quickly, collects from customers promptly, and pays suppliers in a reasonable time, so cash keeps flowing.
What is q1?Show answer
Cost of sales is \90,000\. State the inventory turnover. [2 marks]
What is q2?Show answer
Trade receivables are \30,000\. State the collection period in days. [2 marks]
What is q3?Show answer
State one problem caused by a rising receivables collection period. [1 mark]
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