These eight original questions cover financial statements and interpretation in SPM Business. Attempt each one on paper, then open the answer.
All businesses and figures are fictional. Amounts are in RM.
Practice questions
Question 1. A stall earned RM12 500 and spent RM11 000 in each month. Find the surplus.
Answer
Surplus = 12 500 − 11 000 = RM1 500.
Question 2. Using question 1, what percentage of income is the surplus?
Answer
1 500 ÷ 12 500 × 100 = 12%.
Question 3. A florist made a surplus of RM2 000 in December and RM500 in January. The owner says the business is getting worse. Comment.
Answer
Two single months are not enough for a trend. December may include festive demand, so January may be normal for a quieter month.
A fair comment: “The fall suggests December was unusually strong, but the figures do not show a decline. The owner should compare January with last January.”
Question 4. A tailor’s sales rose from RM50 000 to RM60 000, and profit rose from RM5 000 to RM5 400. Calculate the change in sales and profit as a percentage of the old figure.
Answer
Sales rose by 10 000 ÷ 50 000 = 20%. Profit rose by 400 ÷ 5 000 = 8%.
Profit as a share of sales fell from 10% to 9%.
Question 5. Write a qualified conclusion for question 4.
Answer
“Sales rose by 20% but profit rose by only 8%, which suggests costs grew faster than sales. The figures do not show which cost rose, so the tailor should compare the expense lists for the two years.”
Question 6. Dapur Sari has a monthly surplus of RM850. Should the owner hire a worker for RM1 400 each month? Answer with care.
Answer
On the figures alone, the extra wage would turn the surplus into a deficit of RM550 (850 − 1 400) unless sales rise by more than RM550.
A careful answer: “The hire is not affordable at present sales, but it may pay off if the worker lets the business accept orders it now refuses. The owner needs to know how many orders are being lost.”
Question 7. A student says, “A shop with income of RM10 000 has a profit of RM10 000.” Explain the error.
Answer
Income is what the shop earned, and profit is income less expenditure. If expenditure is RM9 150, the profit is RM850.
Question 8. A cafe’s statement shows a surplus for the year. Name one extra piece of information that would help the owner judge the result, and explain why.
Answer
Last year’s statement would let the owner see whether the surplus is growing or shrinking. A month-by-month record would show whether one busy season produced most of it.
If you got some wrong
Questions 1, 2 and 7 point back to reading income and expenditure information. Questions 3 and 8 relate to explaining limitations of one-period comparisons.
Questions 4 to 6 use the ideas in interpreting financial ratios and connecting figures to business decisions.
Plan your wording with the Business case-answer planner. A teacher can also work on it with you in online one-to-one Business tuition.