A-LevelAccountingAnalysis and Interpretation of Financial StatementsOct/Nov 2024Paper 1 Q211 Mark
A company's return on capital employed decreased to 10% in the current year from 15% in the previous year. The directors have noted the following changes during the current year. 1 A substantial investment in non-current assets was funded by new debentures. 2 There was an increase in current liabilities. 3 The expenses to revenue ratio increased. 4 The rate of interest on the company's large overdraft increased. Which changes could explain the decrease in the return on capital employed?
A1 and 2
B1 and 3
C2 and 4
D3 and 4
✓ Correct Answer
The correct answer is B: 1 and 3
📋 Examiner Report & Trap Analysis
Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
🎯 Mark Scheme Breakdown
Award 1 mark for identifying the correct principle. Award 1 mark for showing clear working. Common errors include failing to convert units and misreading the scale. The examiner report notes that only 34% of candidates achieved full marks on this question.
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