Analysis & Interpretation of Financial Statements is one of 9 topics in the Grade 12 Accounting CAPS syllabus, covered across 3 lessons on Study Vault. Below are real practice questions from this topic with full worked answers.
Sample practice questions
Easy
1. The gross profit percentage on sales is calculated as:
(Gross Profit / Sales) x 100
(Sales / Gross Profit) x 100
(Gross Profit / Cost of Sales) x 100
(Net Profit / Sales) x 100
Answer: (Gross Profit / Sales) x 100 — Gross profit % on sales = (Gross Profit / Sales) x 100, showing what percentage of each sales rand remains after the cost of goods sold.
Easy
2. Return on shareholders' equity (ROSHE) measures:
The return earned for shareholders on the capital they have invested in the company
The percentage of sales that is gross profit
The business's ability to pay short-term debts
How quickly stock is sold
Answer: The return earned for shareholders on the capital they have invested in the company — ROSHE = (Net Profit After Tax / Average Shareholders' Equity) x 100, measuring the return shareholders are earning on their invested capital.
Medium
3. A business had Sales of R600 000 and Cost of Sales of R400 000. Calculate the gross profit percentage on sales, to 2 decimal places.
