Lesson 3.5.2.2

3.5.2.2 Profitability ratios and timings of cash flows Quiz: AQA Business, Unit 5

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 3.5.2.2, Profitability ratios and timings of cash flows: 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. Gross profit margin is calculated as gross profit divided by what?

    • Cost of sales
    • Operating profit
    • Revenue
    • Total assets

  2. Operating profit margin is calculated as operating profit divided by what?

    • Cost of sales
    • Revenue
    • Total assets
    • Gross profit

  3. How are trade receivables classified on a statement of financial position?

    • Current liabilities
    • Long-term liabilities
    • Current assets
    • Non-current assets

  4. How are trade payables classified on a statement of financial position?

    • Non-current assets
    • Current assets
    • Current liabilities
    • Shareholders equity

  5. What does the receivables days ratio measure?

    • Supplier payment time
    • Asset utilisation rate
    • Inventory turnover speed
    • Customer payment time

  6. What does the payables days ratio measure?

    • Debt collection speed
    • Supplier payment time
    • Capital payback period
    • Customer payment time

  7. Which profit margin ratio is directly affected by changes in cost of sales?

    • Operating profit margin
    • Net profit margin
    • Gross profit margin
    • Return on capital

  8. A business has revenue of 500,000 and gross profit of 175,000. What is its gross profit margin?

    • 28.6%
    • 350%
    • 65%
    • 35%

  9. A business has revenue of 2,000,000 and operating profit of 240,000. What is its profit from operations margin?

    • 120%
    • 12%
    • 8%
    • 16%

  10. A business has revenue of 900,000 and profit for the year of 45,000. What is its profit for the year margin?

    • 50%
    • 20%
    • 0.5%
    • 5%

  11. A business has trade receivables of 120,000 and annual credit sales of 1,095,000. What are its receivables days?

    • 91 days
    • 30 days
    • 40 days
    • 50 days

  12. A business has trade payables of 60,000 and annual purchases of 438,000. What are its payables days?

    • 60 days
    • 73 days
    • 50 days
    • 45 days

  13. A business's receivables days increase from 30 to 55 days. What is the primary impact?

    • Increased share capital
    • Increased gross profit
    • Reduced cash flow
    • Reduced operating costs

  14. A firm pays suppliers in 30 days but collects customer payments in 60 days. What exists?

    • A capital gain
    • A profit loss
    • A cash gap
    • An inventory surplus

  15. What does a gross profit margin of 40% indicate about revenue?

    • 40% ROCE
    • 40p per £1
    • 60p per £1
    • 40% net profit

  16. Why should a business monitor receivables days alongside profitability margins?

    • Profits guarantee cash
    • Receivables equal liabilities
    • Profit excludes timing
    • Margins ignore costs

  17. A business has annual credit sales of 1,460,000 and receivables days of 45. What is its trade receivables balance?

    • 180,000
    • 45,000
    • 240,000
    • 120,000

  18. A firm reduces its payables from £120,000 to £80,000. What is the effect on cash?

    • £40,000 reduction
    • £120,000 increase
    • £80,000 reduction
    • £40,000 increase

  19. A business has revenue of 3,000,000, a gross profit margin of 30% and operating expenses of 600,000. What is its profit from operations margin?

    • 10%
    • 600%
    • 30%
    • 20%

  20. Which financial component can cause a firm with high gross profit to have low net profit?

    • High trade receivables
    • High direct costs
    • Low sales volume
    • High operating expenses

All AQA Business quizzes