Interpret accounting information

Practice

Recall it first, then use it — testing yourself builds the memory, where rereading the notes above only feels easier.

Recall and application shuffled together — you have to work out what each item wants before you can answer it, which is the part the exam actually tests. Both kinds feed the same spacing schedule, so anything you miss comes back sooner.

Say the answer out loud before flipping — that attempt is where the learning happens, even when you get it wrong.

Exam-style only. Instant feedback, shuffled each attempt, best score saved on this device.

What actually comes up

Three questions every year, always built around ONE small NZ business, using a resource booklet of real analysis-measure figures (not reproduced here — the figures below are transcribed from the exam papers' own visible tables). Every part follows meaning → reason → link/consequence, and the paper always ends with a justified recommendation.

Across 4 years

The pattern — what to prepare

The 2025 paper ↗ Marking schedule ↗

Question One

Direct Delivery replaced a petrol van with a hybrid van; fees received, courier costs, and profit % are compared 2024 vs 2025.

• % change in fees received: +4.2% (2024) → +6.8% (2025)
• Courier cost %: 73.0% → 67.0%; Petrol expense %: 23.0% → 18.3%; Profit %: 21.6% → 26.5%

• a Discuss the change in fees received — the meaning of +6.8% in 2025, and one reason not related to the new van. Merit
• b Discuss how the hybrid van affected courier costs — the meaning of 67.0%, why some costs rose/fell/stayed the same, and a detailed reason (other than fee growth) for the trend and its profit impact. Excellence

Question Two

Age of accounts receivable rises to 67 days in 2025; the liquid ratio improves to 4.56:1.

• Age of accounts receivable: 46 days (2024) → 67 days (2025)
• Liquid ratio: 1.75:1 (2024) → 4.56:1 (2025)

• a Discuss the impact of the age of receivables — the meaning of 46 days, a reason for the trend, and a recommendation with its likely profit impact. Excellence
• b Justify why Dan should be cautious about the improved liquid ratio — its meaning, why it is misleading given the receivables trend, and one consequence of not collecting faster. Excellence

Question Three

Finance costs and the equity ratio both move against Direct Delivery after the van purchase; a new courier-route expansion is being considered.

• Finance costs %: 1.4% → 2.7%; Equity ratio: 0.79:1 → 0.75:1

• a Evaluate financial stability in 2025 — the meaning of the 0.75:1 equity ratio, and how the two trends link to the van purchase. Excellence
• b Justify whether Dan should expand with a new courier route — a clear YES/NO, three reasons (one an analysis measure), and dollar/analysis figures. Excellence

The 2024 paper ↗ Marking schedule ↗

Question One

SYS's sales and gross profit rose, yet it posted a loss; expenses and finance costs both climbed.

• % change in sales: +6.1% → +5.2%; Total expense %: 43.2% → 48.9%; Profit %: 5.6% → −1.5%
• Finance cost %: 0.9% → 1.8%; Equity ratio: 0.49:1 → 0.39:1

• a Justify how rising expenses drove the profit % trend — the meaning of 48.9%, a reason other than finance costs, and the link to profit %. Excellence
• b Discuss the equity ratio/finance cost relationship — the reason finance costs rose, how that fed the equity ratio trend, with dollar amounts. Excellence

Question Two

Sam marks up inventory by 110%, but reported mark-up is only 90–95% due to damaged and missing stock; inventory turnover beats the industry average.

• Mark-up %: 95.0% → 90.0% (industry 100.0%); Gross profit %: 48.7% → 47.4% (industry 50.0%)
• Inventory turnover: 3.4 → 3.8 times (industry 3.0)

• a Explain why reported mark-up is lower than the intended 110% — what "marks up by 110%" means with a
  00 example, and how damaged/missing inventory caused the gap. Merit
• b Explain how damaged/missing inventory gives Sam a false sense of security from the above-average inventory turnover. Merit
• c Discuss one positive and one negative consequence of the 110% mark-up (above industry average), including impact on sales and profit. Excellence

Question Three

SYS's current and liquid ratios both improve but stay far apart; the accountant expects the situation to improve next year.

• Current ratio: 3.01:1 → 3.97:1 (industry 2.58:1); Liquid ratio: 0.01:1 → 0.67:1 (industry 0.48:1)

• a Discuss the liquid ratio results — the meaning of 0.67:1, the reason for the trend, and one negative consequence of that reason. Excellence
• b Explain one reason for the gap between the current and liquid ratios in 2024. Merit
• c Justify, with two reasons, how and why the financial situation should improve next year — one profitability reason, one liquidity/stability reason, using the resource and figures. Excellence

The 2022 paper ↗ Marking schedule ↗

Question One

Laki's Landscaping introduced credit for some customers; percentage change in fees received, administrative expense %, and profit % are compared 2021 vs 2022.

• % change in fees received: 25.0% (2021) → 33.1% (2022)
• Administrative expense %: 6.5% → 7.3%; Profit %: 16.2% → 21.2%

• a Justify how and why administrative expenses have been impacted by allowing some customers credit — the meaning of the 7.3% administrative expense percentage in 2022, and one reason for the trend relating to the introduction of credit. Merit
• b Justify how and why introducing credit has had a positive impact on profitability, with figures — the meaning of the 21.2% profit percentage, and at least one specific example of how credit services contributed to the trend. Excellence

Question Two

Age of accounts receivable and the liquid ratio both rose sharply after credit was introduced.

• Age of accounts receivable: 48 days in 2022 (28-day terms expected)
• Liquid ratio: 1.13:1 (2021) → 4.54:1 (2022)

• a Justify, using the appropriate analysis measure, why Laki should be happy with the ability to pay monthly expenses and immediate debts — state the measure, explain the 2022 result, and how introducing credit contributed to the trend. Excellence
• b Justify how and why Laki might have a false sense of confidence in the ability to pay immediate debts — the meaning of the 48-day age of accounts receivable, one reason it exceeds the 28-day expectation, and why this creates false confidence. Excellence

Question Three

Laki's Landscaping bought a new truck; equity ratio and return on total assets both fell for the quarter despite rising fees and profit.

• Equity ratio: 0.64:1 (31 March) → 0.40:1 (30 June); Return on total assets: 18.9% → 14.8%
• Fees received: $50,000 → $56,000; Profit for the quarter: $5,600 → $6,400

• a Justify how and why the new truck purchase impacted financial stability — the meaning of the 0.40:1 equity ratio, and the impact of the purchase on the equity ratio and stability. Excellence
• b Justify how and why the new truck purchase impacted profitability for the quarter — the meaning of the 14.8% return on total assets, and why no major changes are needed to improve it next quarter. Excellence

The 2023 paper ↗ Marking schedule ↗

Question One

Mika began selling second-hand inventory alongside new; sales, mark-up, and inventory turnover all shifted.

• Mark-up %: 57.8% → 62.2%; Gross profit %: 36.6% → 38.3%; % change in sales: +10.2% → +18.8%; Inventory turnover: 6 → 7 times

• a Justify whether Mika should be pleased with selling second-hand inventory, in terms of sales and profit — the meaning of +18.8%, and how it influenced sales/profit. Excellence
• b Explain how second-hand inventory affected mark-up % and inventory turnover — the meaning of "seven times", and justify the link to both trends. Excellence

Question Two

Inventory turnover improved, but Mika struggles to pay accounts payable on time; distribution costs, current ratio, and liquid ratio are all given.

• Distribution cost %: 25.2% → 26.5%; Inventory turnover: 6 → 7 times; Current ratio: 4.20:1 → 4.69:1; Liquid ratio: 0.44:1 → 0.51:1

• a Explain how the distribution cost % trend impacted inventory turnover, and justify the link between them. Merit
• b Justify why Mika struggles to pay accounts payable on time — the meaning of the 4.69:1 current ratio, why it differs so much from the 0.51:1 liquid ratio, and one reason plus one consequence. Excellence

Question Three

Mika's equity ratio and return on equity both improved; she is weighing two funding options for an Auckland expansion.

• Equity ratio: 0.67:1 → 0.71:1; Return on average equity: 44.6% → 52.4%
• Option 1:
  5,000 savings + $25,000 loan at 11.5%; Option 2: $40,000 loan at 11.5%

• a Justify why Mika should be happy with her capital investment — the meaning of the 0.71:1 equity ratio, and a reason for the return-on-equity trend. Merit
• b Recommend how Mika should fund the Auckland expansion between the two options, using at least one analysis measure and one other reason, explaining why it beats the alternative. Excellence

Grades above are read from each year's own Achievement/Merit/Excellence evidence, condensed to the actual task — the schedules also grade holistically per question on a 0–8 scale, not a fixed mark per bullet. The resource booklets themselves are not cached, so only the figures visible in each year's exam paper are transcribed above.

Past exams & resources

⏱ Timed opens the paper and starts a countdown matching the exam length. Official NZQA PDFs. If a link 404s, that year’s paper may sit under a slightly different code: browse the NZQA subject page.