Question 1

**Section A**

SwiftLogistics, a courier service, has the following financial data for the year:
- Revenue: $2,500,000
- Non-current assets: $800,000
- Current assets: $300,000
- Current liabilities: $100,000

Calculate the Asset Turnover ratio for the year.

*(Enter your answer as a decimal to one decimal place, e.g., 1.5)*

Accepted Answer

1. Calculate Capital Employed (Total Assets - Current Liabilities). Total Assets = 800k + 300k = 1,100k. Capital Employed = 1,100k - 100k = 1,000k.
2. Calculate Asset Turnover: Revenue / Capital Employed.
3. 2,500,000 / 1,000,000.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Dividing Revenue by Total Assets ($1,100,000) without deducting current liabilities, resulting in 2.27.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA MA — Management Accounting Practice Exam 6

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