Study Guide
Finance: Ratios, Cash Flow and Financial Strategies
HSC/VCE-style study notes on the finance function: financial objectives, sources of finance, the three financial statements and the ratios…
- Difficulty
- Level 3 · Challenge
- Time
- 30 min
WorksheetYear 12Level 3 · ChallengeHSCVCE
Free Year 12 Financial Ratios Practice Worksheet
Exam-style practice in calculating and interpreting the financial ratios used in senior Business Studies: current ratio, debt-to-equity ratio, gross profit ratio, net profit ratio, expense ratio, return on equity and accounts receivable turnover. Every question uses fictional company figures and comes with a fully worked solution and marks, finishing with a two-year comparison that asks for a recommendation.
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- Year
- Year 12
- Subject
- Business Studies
- Topic
- Finance
- Difficulty
- Level 3 · Challenge
- Estimated time
- 30 minutes
- Curriculum
- NSW Syllabus (NESA)
- Questions
- 10
- Answers
- Included, with working
- Format
- PDF (A4) + print
Students will practise
- calculating liquidity, gearing, profitability and efficiency ratios from financial statement extracts
- calculating cost of goods sold and gross profit from inventory figures
- interpreting ratios against benchmarks and trends
- recommending financial strategies based on ratio analysis
Curriculum: NSW Syllabus (NESA). We show specific outcome codes only where they have been verified against the official curriculum document.
What's next?
Completed: Financial Ratios Practice
You've reached the end of this topic — next up: Human Resources
How to use this worksheet
- Print the PDF or complete it on screen. Write the student's name and date at the top.
- Read the instructions for each part together before starting. Encourage working to be shown.
- Mark with the answer sheet. Use the model answers and success criteria as a guide rather than a single right answer.
- Record the score, celebrate what went well, then follow the "What's next" suggestion.
Common questions
Who is this worksheet for?
Year 12 students (typically ages 17–18) working on finance. It is pitched at level 3 · challenge.
Are the answers included?
Yes. The PDF includes a full answer sheet with model answers and success criteria where there is more than one good answer. You can also view the answers online.
How long does it take?
About 30 minutes for 10 questions. Short, regular sessions work best: two or three a week beats one long one.
Do I need to sign up to download?
No. Click Download Free PDF and it opens immediately. It is free for personal, classroom and homeschool use.
What should we do next?
Move on to Human Resources.
Preview
Year 12 · Business Studies · Finance
Financial Ratios Practice
Success Tutoring
Student name:
Date:
Score: /
All businesses are fictional. Answer in the space provided; a calculator may be used.
Financial ratios: calculate and interpret
Show the formula, substitute the figures and state the result with the correct form (x:1 or %). Where a question asks you to comment, assess or recommend, write in full sentences and refer to the figures. Total: 26 marks.
1.Pinnacle Cycles Pty Ltd has current assets of $180,000 and current liabilities of $120,000. Calculate the current ratio and state what it means.[2 marks]
2.Extract from the balance sheet of Glasshouse Nursery: cash $20,000; accounts receivable $45,000; inventory $55,000; accounts payable $60,000; bank overdraft $40,000. Calculate the current ratio and comment on the liquidity of the business.[3 marks]
3.Meridian Freight Ltd reports total liabilities of $350,000 and owner's equity of $500,000. Calculate the debt-to-equity ratio.[2 marks]
4.Balance sheet extract for Saltbush Catering: current liabilities $90,000; non-current liabilities $210,000; owner's equity $250,000. Calculate the debt-to-equity ratio and assess the solvency of the business.[3 marks]
5.Northgate Books had sales of $800,000. Opening inventory was $60,000, purchases were $540,000 and closing inventory was $80,000. Calculate the cost of goods sold, the gross profit and the gross profit ratio.[3 marks]
6.Northgate Books (from the previous question) had gross profit of $280,000 on sales of $800,000 and total expenses of $200,000. Calculate the net profit and the net profit ratio.[2 marks]
7.Northgate Books has owner's equity of $400,000 and net profit of $80,000. Calculate the return on equity and explain what it tells the owners.[2 marks]
8.Cobalt Dental had sales of $640,000 and total expenses (excluding cost of goods sold) of $144,000. Calculate the expense ratio and state what a falling expense ratio would indicate.[2 marks]
9.Ironbark Timber Supplies made credit sales of $730,000 during the year. Accounts receivable were $68,000 at the start of the year and $78,000 at the end. Calculate the accounts receivable turnover ratio and the average collection period in days, and comment if the business offers 30-day credit terms.[3 marks]
10.Two years of figures for Wattle Street Pharmacy: Year 1 current assets $300,000 and current liabilities $150,000; Year 2 current assets $250,000 and current liabilities $200,000. Calculate the current ratio for each year, explain what the change indicates, and recommend one strategy to improve the position.[4 marks]
Preview — the PDF contains the full resource and answer sheet.
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About this resource
- Created by
- Success Tutoring
- Last reviewed
- 1 October 2026
- How it was made
- Written by our team
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