Cambridge International AS & A Level Accounting 9706 syllabus for 2023, 2024 and 2025.
Subject content
Appendix – Summary of commonly used ratios (AS & A Level)
Profitability ratios
Gross profit
Gross profit margin (%) × 100
Revenue
Gross profit
Mark-up (%) × 100
Cost of sales
Profit for the year
× 100
Revenue
Profit margin (%) can also be expressed as
Profit for the year (after interest)
× 100
Revenue
Profit from operations
× 100
Return on capital employed (%) Capital employed
Capital employed = issued shares + reserves + non-current liabilities
Expenses
Expenses to revenue ratio (%) × 100
Revenue
Operating expenses to revenue Operating expenses
× 100
ratio (%) Revenue
Liquidity ratios
Current assets
Current ratio Current liabilities
Answer presented as a ratio
Current assets – inventory
Acid test ratio Current liabilities
Answer presented as a ratio
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Cambridge International AS & A Level Accounting 9706 syllabus for 2023, 2024 and 2025. Subject content
Efficiency ratios
Net revenue
Non-current asset turnover (times)
Total net book value of non-current assets
Trade receivables
Trade receivables turnover (days) × 365 days
Credit sales
Trade payables
Trade payables turnover (days) × 365 days
Credit purchases
Average inventory
Inventory turnover (days) × 365 days
Cost of sales
Cost of sales
Rate of inventory turnover (times)
Average inventory
Solvency and other ratios (A Level only)
Trade receivables turnover (days) + inventory turnover (days) –
Working capital cycle (days)
trade payables turnover (days)
Net working assets
× 100
Net working assets to revenue Revenue (sales)
(sales) (%)
Net working assets = inventories + trade receivables – trade payables
Profit from operations
Interest cover (times)
Interest payable
Fixed cost capital
× 100
Total capital
Gearing (%) which is
Non-current liabilities
× 100
Issued ordinary share capital + all reserves + non-current liabilities
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Cambridge International AS & A Level Accounting 9706 syllabus for 2023, 2024 and 2025. Subject content
Investment ratios (stock exchange ratios) (A Level only)
Profit for the year
Earnings per share
Number of issued ordinary shares
Market price per share
Price/earnings
Earnings per share
Annual ordinary dividend
Number of issued ordinary shares
Dividend per share where
Annual ordinary dividend = interim dividend paid + final dividend
proposed
Dividend per share
Dividend yield
Market price per share
Profit for the year available to pay ordinary dividend
Dividend cover
Annual ordinary dividend
Calculate ratios using year-end balances where appropriate, unless the question specifies the use of
average figures.
Calculate ratios to the number of decimal places required by the question.
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Advanced Higher Accounting
Formulae Sheet for Variance Analysis
(Standard Quantity for Production × Standard
Total Material Cost Variance
Price) − (Actual Quantity used × Actual Price)
(Standard Price − Actual Price for Unit) ×
Material Price Variance
Actual Quantity used
(Standard Quantity for Production − Actual
Material Usage Variance
Quantity used) × Standard Price
(Standard Rate × Standard Hours for
Total Labour Cost Variance Production) − (Actual Rate × Actual Hours
worked)
(Standard Rate − Actual Rate) × Actual Hours
Labour Rate Variance
worked
(Standard Hours for Production − Actual Hours
Labour Efficiency Variance
worked) × Standard Rate
(Standard Hours for Production × Variable
Variable Overhead Cost Variance Overhead Absorption Rate) − Actual Variable
Overhead Cost
(Actual Hours worked × Variable Overhead
Variable Overhead Expenditure
Absorption Rate) − Actual Variable Overhead
Variance
Cost
(Standard Hours for Production − Actual Hours
Variable Overhead Efficiency Variance
worked) × Variable Overhead Absorption Rate
1. (Standard Hours for Production × Fixed
Overhead Absorption Rate) − Actual Fixed
Overhead Cost
Fixed Overhead Cost Variance
2. (Standard Units for Production × Fixed
Overhead Absorption Rate) − Actual Fixed
Overhead Cost
Budgeted Fixed Overheads − Actual Fixed
Fixed Overhead Expenditure Variance
Overhead Cost
1. Budgeted Fixed Overheads − (Standard
Hours for Actual Production × Fixed Overhead
Fixed Overhead Volume Variance Absorption Rate)
2. (Actual Activity − Normal Activity) × Fixed
Overhead Absorption Rate
(Actual Selling Price × Actual Quantity) −
Total Sales Revenue Variance
(Budgeted Selling Price × Budgeted Quantity)
(Actual Selling Price − Budgeted Selling Price)
Sales Price Variance
× Actual Quantity
(Actual Quantity − Budgeted Quantity) ×
Sales Volume Variance
Budgeted Selling Price