Lesson 3.5.1

3.5.1 Setting financial objectives Quiz: AQA Business, Unit 5

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 3.5.1, Setting financial objectives: 20 multiple choice questions for the AQA Business (7132), Unit 5: Financial management, written with Revision Ninja.

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The 20 questions

  1. What financial measure expresses investment profit as a percentage of capital invested?

    • Current ratio
    • Break-even output
    • Profit margin
    • Return on investment

  2. What does cash flow record that distinguishes it from profit?

    • Accrued operating expenses
    • Profit margins earned
    • Actual cash movements
    • Total sales revenue

  3. Gross profit is calculated by deducting cost of sales from what?

    • Operating expenses
    • Revenue
    • Total overheads
    • Tax and interest

  4. Operating profit is gross profit minus which type of costs?

    • Operating expenses
    • Dividends paid
    • Interest and tax
    • Cost of sales

  5. Which profit figure remains after deducting all expenses, interest and tax?

    • Operating profit
    • Contribution
    • Profit for the year
    • Gross profit

  6. What is a primary goal when setting a cash flow objective?

    • Maximising market share
    • Minimising total costs
    • Maintaining liquid cash
    • Maximising sales volume

  7. What does a revenue objective specifically target for a business?

    • Net cash flow
    • Net profit margin
    • Total sales income
    • Capital investment return

  8. A business invests 200,000 and earns a profit of 30,000 from it. What is the ROI?

    • 30%
    • 15%
    • 6.7%
    • 150%

  9. A business has revenue of 800,000 and cost of sales of 500,000. What is its gross profit?

    • 300,000
    • 1,300,000
    • 500,000
    • 200,000

  10. A business has gross profit of 300,000 and operating expenses of 180,000. What is its operating profit?

    • 300,000
    • 480,000
    • 120,000
    • 180,000

  11. A business has operating profit of 120,000, interest of 20,000 and tax of 25,000. What is its profit for the year?

    • 95,000
    • 145,000
    • 120,000
    • 75,000

  12. Why might a profitable business experience a low bank balance after offering credit terms?

    • High direct costs
    • Increased tax payments
    • Delayed customer payments
    • Low operating margins

  13. Which two values are required to calculate return on investment?

    • Profit and capital
    • Cash and liabilities
    • Revenue and costs
    • Sales and assets

  14. A firm targeting £1.2m revenue grows its £900,000 current revenue by 10%. What is the shortfall?

    • £300,000
    • £90,000
    • £100,000
    • £210,000

  15. Which profit measure best assesses direct production efficiency before indirect expenses?

    • Retained profit
    • Gross profit
    • Net profit
    • Operating profit

  16. Why can a highly profitable business still face sudden insolvency?

    • Excessive revenue growth
    • Low gross profit
    • Insufficient liquid cash
    • High dividend payments

  17. A business has revenue of 1,000,000 and cost of sales of 640,000. What is its gross profit margin?

    • 36%
    • 40%
    • 360%
    • 64%

  18. A business has an investment of 500,000. Its operating profit is 100,000, interest is 10,000 and tax is 22,000. What is the ROI based on profit for the year?

    • 10%
    • 17%
    • 20%
    • 13.6%

  19. How can granting longer trade credit to boost profit conflict with cash objectives?

    • Lower gross margins
    • Higher fixed overheads
    • Reduced sales revenue
    • Delayed cash inflows

  20. A business has revenue of 2,500,000 and operating profit of 375,000. What is its operating profit margin?

    • 15%
    • 37.5%
    • 18%
    • 12%

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