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CIE · IGCSE · Business Studies

Profitability and liquidity ratios
Practice Questions

20 CIE IGCSE Business Studies questions on Profitability and liquidity ratios, each with instant feedback and a full examiner-style mark scheme.

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Try 2 sample questions on Profitability and liquidity ratios

Question 1 · 1 mark · Difficulty 1/3

Which formula is used to calculate the gross profit margin?

  1. (Net profit ÷ Total assets) × 100
  2. (Gross profit ÷ Cost of sales) × 100
  3. (Gross profit ÷ Revenue) × 100
  4. (Net profit ÷ Revenue) × 100
Show answer & explanation
✓ Answer: C(Gross profit ÷ Revenue) × 100
Gross profit margin is calculated as (Gross profit ÷ Revenue) × 100. Option B is the formula for net profit margin, not gross. Option C incorrectly uses cost of sales as the denominator instead of revenue. Option D confuses net profit margin with return on capital employed.
Question 2 · 1 mark · Difficulty 2/3

A business has current assets of $120,000 and current liabilities of $80,000. What is its current ratio?

  1. 2.0:1
  2. 0.67:1
  3. 1.5:1
  4. 1.25:1
Show answer & explanation
✓ Answer: C1.5:1
Current ratio = Current assets ÷ Current liabilities = $120,000 ÷ $80,000 = 1.5:1. Option A reverses the calculation (80,000 ÷ 120,000). Option B results from an arithmetic error. Option D would require current assets to be double the current liabilities ($160,000 ÷ $80,000).
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CIE IGCSE Business Studies: Profitability and liquidity ratios FAQ

How many CIE IGCSE Business Studies questions on Profitability and liquidity ratios are there on Kramizo?
Kramizo currently has 20 exam-board-aligned practice questions on Profitability and liquidity ratios for CIE IGCSE Business Studies, with new questions added every week. Each question gives you instant feedback and a full examiner-style mark scheme that tells you exactly what would earn marks on a real CIE paper. The questions span the full difficulty range — from straightforward recall (level 1) right up to multi-step reasoning and evaluation (level 3) — so the bank works for first-pass revision and final exam-week stress testing alike.
Is Kramizo free for CIE IGCSE students preparing for Business Studies?
Yes — completely free. Every student gets 45 questions a day on the free plan, with no card required and no trial countdown. That free quota works across every subject and every topic in our bank, so you can mix Profitability and liquidity ratios practice with other Business Studies topics or even switch to a totally different CIE subject without paying anything. Kramizo's optional Pro plan removes the daily cap and adds detailed progress analytics, but the free tier is the real product — used by thousands of GCSE, IGCSE and CSEC students.
Are the Profitability and liquidity ratios questions aligned to the official CIE IGCSE Business Studies syllabus?
Every question is written against the published CIE IGCSE Business Studies specification, including the exact command words (state, describe, explain, calculate, evaluate, etc.), mark allocations, and difficulty tier you'd see on a real CIE paper. Explanations are written in the style of official examiner mark schemes — they tell you what is being awarded marks and why distractors are wrong, not just whether you got it right. The bank is continually refined to match the latest syllabus updates from CIE.
How is Profitability and liquidity ratios typically tested on CIE IGCSE Business Studies papers?
Profitability and liquidity ratios appears across multiple question types on real CIE IGCSE Business Studies papers — most commonly as multiple-choice questions in the objective section, structured short-answer questions in the main paper, and occasionally as part of an extended response. Kramizo's practice bank reflects that mix: 4-option MCQs, true/false statements, fill-in-the-blank key terms, multi-select questions, and ordering questions. Working through the bank gives you exposure to every question style examiners actually use.

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