Section A: Theory of Financial Accounting
Question 4
This question tested candidates’ ability to identify accounting ratios and its application to interpretation of financial statements
Observation
Majority of the candidates attempted this question but the performance was poor.
Some of the suggested answers are:
Main Groups of Accounting Ratios
(i) Profitability Ratios/Performance Ratios
(ii) Liquidity Ratios/Solvency Ratios
(iii) Efficiency Ratios/Asset Ratios/Activity Ratios
(iv) Capital Structure Ratios/Gearing ratios/Leverage
(v) Security Ratios/Investor Ratios/Shareholder Ratios