* 0000800000001 * , , Cambridge International AS & A Level ¬O. 4mHuOªE`{5W ¬_tPftiEY ¥¥eUu5¥5UEE5e5U * 7 2 4 0 9 8 8 9 9 0 * ACCOUNTING 9706/32 Paper 3 Financial Accounting February/March 2025 1 hour 30 minutes You must answer on the question paper. You will need: Insert (enclosed) INSTRUCTIONS ● Answer all questions. ● Use a black or dark blue pen. ● Write your name, centre number and candidate number in the boxes at the top of the page. ● Write your answer to each question in the space provided. ● Do not use an erasable pen or correction fluid. ● Do not write on any bar codes. ● You may use an HB pencil for any diagrams, graphs or rough working. ● You may use a calculator. ● International accounting terms and formats should be used as appropriate. ● You should show your workings. INFORMATION ● The total mark for this paper is 75. ● The number of marks for each question or part question is shown in brackets [ ]. ● The insert contains all of the sources referred to in the questions. This document has 16 pages. Any blank pages are indicated. DC (WW) 340728/3 © UCLES 2025 [Turn over

* 0000800000001 *
, ,
Cambridge International AS & A Level
¬O. 4mHuOªE`{5W
¬_tPftiEY
¥¥eUu5¥5UEE5e5U
* 7 2 4 0 9 8 8 9 9 0 *
ACCOUNTING 9706/32
Paper 3 Financial Accounting February/March 2025
1 hour 30 minutes
You must answer on the question paper.
You will need: Insert (enclosed)
INSTRUCTIONS
● Answer all questions.
● Use a black or dark blue pen.
● Write your name, centre number and candidate number in the boxes at the top of the page.
● Write your answer to each question in the space provided.
● Do not use an erasable pen or correction fluid.
● Do not write on any bar codes.
● You may use an HB pencil for any diagrams, graphs or rough working.
● You may use a calculator.
● International accounting terms and formats should be used as appropriate.
● You should show your workings.
INFORMATION
● The total mark for this paper is 75.
● The number of marks for each question or part question is shown in brackets [ ].
● The insert contains all of the sources referred to in the questions.
This document has 16 pages. Any blank pages are indicated.
DC (WW) 340728/3
© UCLES 2025 [Turn over

* 0000800000002 * 2 , , 1 Read Source A in the insert. (a) (i) State how a business creates a general reserve. ........................................................................................................................................... ..................................................................................................................................... [1] DO NOT WRITE IN THIS MARGIN (ii) Explain why a business would create a general reserve. ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ..................................................................................................................................... [2] (b) Prepare for the year ended 31 December 2024: DO NOT WRITE IN THIS MARGIN (i) a statement to show the profit from operations ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... DO NOT WRITE IN THIS MARGIN ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... DO NOT WRITE IN THIS MARGIN ........................................................................................................................................... ........................................................................................................................................... ..................................................................................................................................... [5] ĬÍĊ®Ġ´íÈõÏĪÅĊÝù·þ× © UCLES 2025 ĬßČóÍĪĕČÍýùĪđíõġĂĂ 9706/32/F/M/25 ĥμμÕμÕåÕåĕÕąÅõÅõμÕ DO NOT WRITE IN THIS MARGIN

* 0000800000002 *
2
, ,
1 Read Source A in the insert.
(a) (i) State how a business creates a general reserve.
...........................................................................................................................................
..................................................................................................................................... [1]
DO NOT WRITE IN THIS MARGIN
(ii) Explain why a business would create a general reserve.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
..................................................................................................................................... [2]
(b) Prepare for the year ended 31 December 2024:
DO NOT WRITE IN THIS MARGIN
(i) a statement to show the profit from operations
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... DO NOT WRITE IN THIS MARGIN
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
DO NOT WRITE IN THIS MARGIN
...........................................................................................................................................
...........................................................................................................................................
..................................................................................................................................... [5]
ĬÍĊ®Ġ´íÈõÏĪÅĊÝù·þ×
© UCLES 2025 ĬßČóÍĪĕČÍýùĪđíõġĂĂ 9706/32/F/M/25
ĥμμÕμÕåÕåĕÕąÅõÅõμÕ DO NOT WRITE IN THIS MARGIN

* 0000800000003 * 3 , , BLANK PAGE DO NOT WRITE IN THIS MARGIN DO NOT WRITE IN THIS MARGIN DO NOT WRITE IN THIS MARGIN DO NOT WRITE IN THIS MARGIN ĬÏĊ®Ġ´íÈõÏĪÅĊÝû·þ× [Turn over © UCLES 2025 ĬßċôÕĠęüìûĈßÅąáġòĂ 9706/32/F/M/25 DO NOT WRITE IN THIS MARGIN ĥμÅĕõμÅμμĥąąÅĕåμåÕ

* 0000800000003 *
3
, ,
BLANK PAGE
DO NOT WRITE IN THIS MARGIN
DO NOT WRITE IN THIS MARGIN
DO NOT WRITE IN THIS MARGIN
DO NOT WRITE IN THIS MARGIN
ĬÏĊ®Ġ´íÈõÏĪÅĊÝû·þ× [Turn over
© UCLES 2025 ĬßċôÕĠęüìûĈßÅąáġòĂ 9706/32/F/M/25
DO NOT WRITE IN THIS MARGIN ĥμÅĕõμÅμμĥąąÅĕåμåÕ

* 0000800000004 * 4 , , (ii) the statement of cash flows in accordance with IAS7. ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... DO NOT WRITE IN THIS MARGIN ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... DO NOT WRITE IN THIS MARGIN ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... DO NOT WRITE IN THIS MARGIN ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... DO NOT WRITE IN THIS MARGIN ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ĬÍĊ®Ġ´íÈõÏĪÅĊßù·Ā× © UCLES 2025 ĬßċñÕĦīíÏõÿèħéăñĊĂ 9706/32/F/M/25 ĥąĕĕμμÅĕÕÅõąąĕąμμÕ DO NOT WRITE IN THIS MARGIN

* 0000800000004 *
4
, ,
(ii) the statement of cash flows in accordance with IAS7.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
DO NOT WRITE IN THIS MARGIN
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
DO NOT WRITE IN THIS MARGIN
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... DO NOT WRITE IN THIS MARGIN
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
DO NOT WRITE IN THIS MARGIN
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
ĬÍĊ®Ġ´íÈõÏĪÅĊßù·Ā×
© UCLES 2025 ĬßċñÕĦīíÏõÿèħéăñĊĂ 9706/32/F/M/25
ĥąĕĕμμÅĕÕÅõąąĕąμμÕ DO NOT WRITE IN THIS MARGIN

* 0000800000005 * 5 , , ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... DO NOT WRITE IN THIS MARGIN ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... DO NOT WRITE IN THIS MARGIN ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... Workings: DO NOT WRITE IN THIS MARGIN DO NOT WRITE IN THIS MARGIN [12] ĬÏĊ®Ġ´íÈõÏĪÅĊßû·Ā× [Turn over © UCLES 2025 ĬßČòÍĤħýêăòġ³Ñ×ñúĂ 9706/32/F/M/25 DO NOT WRITE IN THIS MARGIN ĥąĥÕõÕåõÅμåąąõĥõåÕ

* 0000800000005 *
5
, ,
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
DO NOT WRITE IN THIS MARGIN
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
DO NOT WRITE IN THIS MARGIN ...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Workings:
DO NOT WRITE IN THIS MARGIN
DO NOT WRITE IN THIS MARGIN
[12]
ĬÏĊ®Ġ´íÈõÏĪÅĊßû·Ā× [Turn over
© UCLES 2025 ĬßČòÍĤħýêăòġ³Ñ×ñúĂ 9706/32/F/M/25
DO NOT WRITE IN THIS MARGIN ĥąĥÕõÕåõÅμåąąõĥõåÕ

* 0000800000006 * 6 , , Additional information Before 2024, CF Limited contracted a transportation company to deliver goods to its customers. In 2024, the company terminated the contract and purchased two motor vehicles to take over the delivery services. (c) Advise whether or not CF Limited has made a good decision to take over the delivery services. DO NOT WRITE IN THIS MARGIN Justify your answer. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... DO NOT WRITE IN THIS MARGIN ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... DO NOT WRITE IN THIS MARGIN ................................................................................................................................................... ................................................................................................................................................... ............................................................................................................................................. [5] [Total: 25] DO NOT WRITE IN THIS MARGIN ĬÑĊ®Ġ´íÈõÏĪÅĊÞû¶þ× © UCLES 2025 ĬßċòÒĪÿćâĈăĜÓé¶ÙĊĂ 9706/32/F/M/25 ĥÕÅÕõõåÕąÕąąÅõÅμõÕ DO NOT WRITE IN THIS MARGIN

* 0000800000006 *
6
, ,
Additional information
Before 2024, CF Limited contracted a transportation company to deliver goods to its customers.
In 2024, the company terminated the contract and purchased two motor vehicles to take over the
delivery services.
(c) Advise whether or not CF Limited has made a good decision to take over the delivery services.
DO NOT WRITE IN THIS MARGIN
Justify your answer.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
................................................................................................................................................... DO NOT WRITE IN THIS MARGIN
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
DO NOT WRITE IN THIS MARGIN
...................................................................................................................................................
...................................................................................................................................................
............................................................................................................................................. [5]
[Total: 25]
DO NOT WRITE IN THIS MARGIN
ĬÑĊ®Ġ´íÈõÏĪÅĊÞû¶þ×
© UCLES 2025 ĬßċòÒĪÿćâĈăĜÓé¶ÙĊĂ 9706/32/F/M/25
ĥÕÅÕõõåÕąÕąąÅõÅμõÕ DO NOT WRITE IN THIS MARGIN

* 0000800000007 * 7 , , BLANK PAGE DO NOT WRITE IN THIS MARGIN DO NOT WRITE IN THIS MARGIN DO NOT WRITE IN THIS MARGIN DO NOT WRITE IN THIS MARGIN ĬÓĊ®Ġ´íÈõÏĪÅĊÞù¶þ× [Turn over © UCLES 2025 ĬßČñÚĠă÷×òîÍćÑĢÙúĂ 9706/32/F/M/25 DO NOT WRITE IN THIS MARGIN ĥÕμĕμĕÅμĕåÕąÅĕåõĥÕ

* 0000800000007 *
7
, ,
BLANK PAGE
DO NOT WRITE IN THIS MARGIN
DO NOT WRITE IN THIS MARGIN
DO NOT WRITE IN THIS MARGIN
DO NOT WRITE IN THIS MARGIN
ĬÓĊ®Ġ´íÈõÏĪÅĊÞù¶þ× [Turn over
© UCLES 2025 ĬßČñÚĠă÷×òîÍćÑĢÙúĂ 9706/32/F/M/25
DO NOT WRITE IN THIS MARGIN ĥÕμĕμĕÅμĕåÕąÅĕåõĥÕ

* 0000800000008 * 8 , , 2 Read Source B in the insert. (a) State three differences between goodwill and a tangible asset. 1 ................................................................................................................................................ ................................................................................................................................................... DO NOT WRITE IN THIS MARGIN 2 ................................................................................................................................................ ................................................................................................................................................... 3 ................................................................................................................................................ ................................................................................................................................................... [3] (b) Calculate the purchase consideration payable by W Limited. ................................................................................................................................................... DO NOT WRITE IN THIS MARGIN ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... DO NOT WRITE IN THIS MARGIN ............................................................................................................................................. [3] (c) Complete the capital accounts of Ada and Brian on page 9, showing the final settlement with the partnership’s cash at bank account. DO NOT WRITE IN THIS MARGIN ĬÑĊ®Ġ´íÈõÏĪÅĊàû¶Ā× © UCLES 2025 ĬßČôÚĦñòäðõÖåíÄÉĂĂ 9706/32/F/M/25 ĥĥĥĕõĕÅĕõąåąąĕąõõÕ DO NOT WRITE IN THIS MARGIN

* 0000800000008 *
8
,  ,
2 Read Source B in the insert.
(a) State three differences between goodwill and a tangible asset.
1 ................................................................................................................................................
...................................................................................................................................................
DO NOT WRITE IN THIS MARGIN
2 ................................................................................................................................................
...................................................................................................................................................
3 ................................................................................................................................................
...................................................................................................................................................
[3]
(b) Calculate the purchase consideration payable by W Limited.
................................................................................................................................................... DO NOT WRITE IN THIS MARGIN
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
DO NOT WRITE IN THIS MARGIN
............................................................................................................................................. [3]
(c) Complete the capital accounts of Ada and Brian on page 9, showing the final settlement with
the partnership’s cash at bank account.
DO NOT WRITE IN THIS MARGIN
ĬÑĊ®Ġ´íÈõÏĪÅĊàû¶Ā×
© UCLES 2025 ĬßČôÚĦñòäðõÖåíÄÉĂĂ 9706/32/F/M/25
ĥĥĥĕõĕÅĕõąåąąĕąõõÕ DO NOT WRITE IN THIS MARGIN

* 0000800000009 * 9 , , [8] $ Brian DO NOT WRITE IN THIS MARGIN $ Ada DO NOT WRITE IN THIS MARGIN $ Capital accounts Brian DO NOT WRITE IN THIS MARGIN $ Ada DO NOT WRITE IN THIS MARGIN Workings: ĬÓĊ®Ġ´íÈõÏĪÅĊàù¶Ā× [Turn over © UCLES 2025 ĬßċóÒĤíĂÕĊČēñąĘÉòĂ 9706/32/F/M/25 DO NOT WRITE IN THIS MARGIN ĥĥĕÕμõåõĥõõąąõĥμĥÕ

* 0000800000009 *
9
,  ,
[8]
$
Brian
DO NOT WRITE IN THIS MARGIN
$
Ada
DO NOT WRITE IN THIS MARGIN
$
Capital accounts
Brian
DO NOT WRITE IN THIS MARGIN
$
Ada
DO NOT WRITE IN THIS MARGIN
Workings:
ĬÓĊ®Ġ´íÈõÏĪÅĊàù¶Ā× [Turn over
© UCLES 2025 ĬßċóÒĤíĂÕĊČēñąĘÉòĂ 9706/32/F/M/25
DO NOT WRITE IN THIS MARGIN ĥĥĕÕμõåõĥõõąąõĥμĥÕ

* 0000800000010 * 10 , , (d) Prepare the journal entry of W Limited to record the acquisition of the partnership business. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... DO NOT WRITE IN THIS MARGIN ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... DO NOT WRITE IN THIS MARGIN ............................................................................................................................................. [2] Additional information In negotiating the terms of the sale of the business, Ada and Brian initially requested that goodwill be valued at five times the average profit of the last three years, but W Limited only offered two times. They finally reached an agreement of three times. (e) Explain why W Limited did not accept the initial request for five times the average profit. Support your answer with relevant calculations. ................................................................................................................................................... DO NOT WRITE IN THIS MARGIN ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... DO NOT WRITE IN THIS MARGIN ................................................................................................................................................... ................................................................................................................................................... ............................................................................................................................................. [4] ĬÑĊ®Ġ´íÈõÏĪÅĊÝû¸þ× © UCLES 2025 ĬßĉôÓĨùĨÞ÷îðÉïèñúĂ 9706/32/F/M/25 ĥμąÕõĕĥĕÕμåÅąμąõÅÕ DO NOT WRITE IN THIS MARGIN

* 0000800000010 *
10
, ,
(d) Prepare the journal entry of W Limited to record the acquisition of the partnership business.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
DO NOT WRITE IN THIS MARGIN
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
DO NOT WRITE IN THIS MARGIN
............................................................................................................................................. [2]
Additional information
In negotiating the terms of the sale of the business, Ada and Brian initially requested that goodwill
be valued at five times the average profit of the last three years, but W Limited only offered two
times. They finally reached an agreement of three times.
(e) Explain why W Limited did not accept the initial request for five times the average profit.
Support your answer with relevant calculations.
...................................................................................................................................................
DO NOT WRITE IN THIS MARGIN
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
DO NOT WRITE IN THIS MARGIN
...................................................................................................................................................
...................................................................................................................................................
............................................................................................................................................. [4]
ĬÑĊ®Ġ´íÈõÏĪÅĊÝû¸þ×
© UCLES 2025 ĬßĉôÓĨùĨÞ÷îðÉïèñúĂ 9706/32/F/M/25
ĥμąÕõĕĥĕÕμåÅąμąõÅÕ DO NOT WRITE IN THIS MARGIN

* 0000800000011 * 11 , , Additional information To satisfy the purchase consideration, Ada and Brian were offered two options by W Limited. Option 1: fully satisfied by the ordinary shares of W Limited Option 2: fully satisfied by cash DO NOT WRITE IN THIS MARGIN (f) Evaluate whether or not Ada and Brian made the right decision to choose option 1. Justify your answer. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... DO NOT WRITE IN THIS MARGIN ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... DO NOT WRITE IN THIS MARGIN ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ............................................................................................................................................. [5] [Total: 25] DO NOT WRITE IN THIS MARGIN ĬÓĊ®Ġ´íÈõÏĪÅĊÝù¸þ× [Turn over © UCLES 2025 ĬßĊóÛĢõĘÛāă¹čćôñĊĂ 9706/32/F/M/25 DO NOT WRITE IN THIS MARGIN ĥμõĕμõąõÅÅõÅąÕĥμÕÕ

* 0000800000011 *
11
, ,
Additional information
To satisfy the purchase consideration, Ada and Brian were offered two options by W Limited.
Option 1: fully satisfied by the ordinary shares of W Limited
Option 2: fully satisfied by cash
DO NOT WRITE IN THIS MARGIN
(f) Evaluate whether or not Ada and Brian made the right decision to choose option 1. Justify
your answer.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
DO NOT WRITE IN THIS MARGIN ...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
DO NOT WRITE IN THIS MARGIN
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
............................................................................................................................................. [5]
[Total: 25]
DO NOT WRITE IN THIS MARGIN
ĬÓĊ®Ġ´íÈõÏĪÅĊÝù¸þ× [Turn over
© UCLES 2025 ĬßĊóÛĢõĘÛāă¹čćôñĊĂ 9706/32/F/M/25
DO NOT WRITE IN THIS MARGIN ĥμõĕμõąõÅÅõÅąÕĥμÕÕ

* 0000800000012 * 12 , , 3 Read Source C in the insert. (a) State three limitations of using ratios to evaluate the performance of a business. 1 ................................................................................................................................................ ................................................................................................................................................... DO NOT WRITE IN THIS MARGIN 2 ................................................................................................................................................ ................................................................................................................................................... 3 ................................................................................................................................................. ................................................................................................................................................... [3] (b) Calculate, to two decimal places, the following ratios: (i) dividend yield DO NOT WRITE IN THIS MARGIN ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ..................................................................................................................................... [4] DO NOT WRITE IN THIS MARGIN (ii) price/earnings (PE) ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... DO NOT WRITE IN THIS MARGIN ..................................................................................................................................... [3] ĬÑĊ®Ġ´íÈõÏĪÅĊßû¸Ā× © UCLES 2025 ĬßĊòÛĬćđàÿČ²¯ëÒġòĂ 9706/32/F/M/25 ĥąåĕõõąÕåĥąÅÅÕÅμÅÕ DO NOT WRITE IN THIS MARGIN

* 0000800000012 *
12
, ,
3 Read Source C in the insert.
(a) State three limitations of using ratios to evaluate the performance of a business.
1 ................................................................................................................................................
...................................................................................................................................................
DO NOT WRITE IN THIS MARGIN
2 ................................................................................................................................................
...................................................................................................................................................
3 .................................................................................................................................................
...................................................................................................................................................
[3]
(b) Calculate, to two decimal places, the following ratios:
(i) dividend yield DO NOT WRITE IN THIS MARGIN
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
..................................................................................................................................... [4]
DO NOT WRITE IN THIS MARGIN
(ii) price/earnings (PE)
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
DO NOT WRITE IN THIS MARGIN
..................................................................................................................................... [3]
ĬÑĊ®Ġ´íÈõÏĪÅĊßû¸Ā×
© UCLES 2025 ĬßĊòÛĬćđàÿČ²¯ëÒġòĂ 9706/32/F/M/25
ĥąåĕõõąÕåĥąÅÅÕÅμÅÕ DO NOT WRITE IN THIS MARGIN

* 0000800000013 * 13 , , (iii) gearing ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... DO NOT WRITE IN THIS MARGIN ........................................................................................................................................... ........................................................................................................................................... ..................................................................................................................................... [2] (c) Calculate the working capital cycle (round up each component to the next whole day). ................................................................................................................................................... ................................................................................................................................................... DO NOT WRITE IN THIS MARGIN ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... DO NOT WRITE IN THIS MARGIN ................................................................................................................................................... ............................................................................................................................................. [4] DO NOT WRITE IN THIS MARGIN ĬÓĊ®Ġ´íÈõÏĪÅĊßù¸Ā× [Turn over © UCLES 2025 ĬßĉñÓĞċġÙùõ÷īÓĆġĂĂ 9706/32/F/M/25 DO NOT WRITE IN THIS MARGIN ĥąÕÕμĕĥμμĕÕÅÅμåõÕÕ

* 0000800000013 *
13
, ,
(iii) gearing
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
DO NOT WRITE IN THIS MARGIN
...........................................................................................................................................
...........................................................................................................................................
..................................................................................................................................... [2]
(c) Calculate the working capital cycle (round up each component to the next whole day).
...................................................................................................................................................
...................................................................................................................................................
DO NOT WRITE IN THIS MARGIN
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
DO NOT WRITE IN THIS MARGIN ...................................................................................................................................................
............................................................................................................................................. [4]
DO NOT WRITE IN THIS MARGIN
ĬÓĊ®Ġ´íÈõÏĪÅĊßù¸Ā× [Turn over
© UCLES 2025 ĬßĉñÓĞċġÙùõ÷īÓĆġĂĂ 9706/32/F/M/25
DO NOT WRITE IN THIS MARGIN ĥąÕÕμĕĥμμĕÕÅÅμåõÕÕ

* 0000800000014 * 14 , , Additional information X plc, a major competitor, has a shorter working capital cycle than B plc. (d) Discuss the performance of B plc in managing its working capital cycle as compared with X plc. DO NOT WRITE IN THIS MARGIN ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... DO NOT WRITE IN THIS MARGIN ................................................................................................................................................... ................................................................................................................................................... ............................................................................................................................................. [5] Additional information X plc also has a PE ratio higher than B plc. (e) Discuss the performance of B plc as measured by its PE ratio as compared with X plc. DO NOT WRITE IN THIS MARGIN ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... DO NOT WRITE IN THIS MARGIN ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ............................................................................................................................................. [4] [Total: 25] ĬÍĊ®Ġ´íÈõÏĪÅĊàúμĂ× © UCLES 2025 ĬßĊóÒĤøęëïòÜÇĊĂÑĊĂ 9706/32/F/M/25 ĥåÕĕõõåĕÕąÕąąõąμąÕ DO NOT WRITE IN THIS MARGIN

* 0000800000014 *
14
, ,
Additional information
X plc, a major competitor, has a shorter working capital cycle than B plc.
(d) Discuss the performance of B plc in managing its working capital cycle as compared with
X plc.
DO NOT WRITE IN THIS MARGIN
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
................................................................................................................................................... DO NOT WRITE IN THIS MARGIN
...................................................................................................................................................
...................................................................................................................................................
............................................................................................................................................. [5]
Additional information
X plc also has a PE ratio higher than B plc.
(e) Discuss the performance of B plc as measured by its PE ratio as compared with X plc.
DO NOT WRITE IN THIS MARGIN
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
DO NOT WRITE IN THIS MARGIN
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
............................................................................................................................................. [4]
[Total: 25]
ĬÍĊ®Ġ´íÈõÏĪÅĊàúμĂ×
© UCLES 2025 ĬßĊóÒĤøęëïòÜÇĊĂÑĊĂ 9706/32/F/M/25
ĥåÕĕõõåĕÕąÕąąõąμąÕ DO NOT WRITE IN THIS MARGIN

* 0000800000015 * 15 , , BLANK PAGE DO NOT WRITE IN THIS MARGIN DO NOT WRITE IN THIS MARGIN DO NOT WRITE IN THIS MARGIN DO NOT WRITE IN THIS MARGIN ĬÏĊ®Ġ´íÈõÏĪÅĊàüμĂ× © UCLES 2025 ĬßĉôÚĦüĩÎĉÿčēòÖÑúĂ 9706/32/F/M/25 DO NOT WRITE IN THIS MARGIN ĥååÕμĕÅõÅõąąąĕĥõĕÕ

* 0000800000015 *
15
, ,
BLANK PAGE
DO NOT WRITE IN THIS MARGIN
DO NOT WRITE IN THIS MARGIN
DO NOT WRITE IN THIS MARGIN
DO NOT WRITE IN THIS MARGIN
ĬÏĊ®Ġ´íÈõÏĪÅĊàüμĂ×
© UCLES 2025 ĬßĉôÚĦüĩÎĉÿčēòÖÑúĂ 9706/32/F/M/25
DO NOT WRITE IN THIS MARGIN ĥååÕμĕÅõÅõąąąĕĥõĕÕ

* 0000800000016 * 16 , , BLANK PAGE DO NOT WRITE IN THIS MARGIN DO NOT WRITE IN THIS MARGIN DO NOT WRITE IN THIS MARGIN DO NOT WRITE IN THIS MARGIN Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every reasonable effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the publisher will be pleased to make amends at the earliest possible opportunity. To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge Assessment International Education Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download at www.cambridgeinternational.org after the live examination series. Cambridge Assessment International Education is part of Cambridge Assessment. Cambridge Assessment is the brand name of the University of Cambridge Local Examinations Syndicate (UCLES), which is a department of the University of Cambridge. ĬÍĊ®Ġ´íÈõÏĪÅĊÞúμĄ× © UCLES 2025 ĬßĉñÚĠĊĠéćĈĖ±ÎøÁĂĂ 9706/32/F/M/25 ĥĕõÕõĕÅÕåÕõąÅĕÅõąÕ DO NOT WRITE IN THIS MARGIN

* 0000800000016 *
16
, ,
BLANK PAGE
DO NOT WRITE IN THIS MARGIN
DO NOT WRITE IN THIS MARGIN
DO NOT WRITE IN THIS MARGIN
DO NOT WRITE IN THIS MARGIN
Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every
reasonable effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the
publisher will be pleased to make amends at the earliest possible opportunity.
To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge
Assessment International Education Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download
at www.cambridgeinternational.org after the live examination series.
Cambridge Assessment International Education is part of Cambridge Assessment. Cambridge Assessment is the brand name of the University of Cambridge
Local Examinations Syndicate (UCLES), which is a department of the University of Cambridge.
ĬÍĊ®Ġ´íÈõÏĪÅĊÞúμĄ×
© UCLES 2025 ĬßĉñÚĠĊĠéćĈĖ±ÎøÁĂĂ 9706/32/F/M/25
ĥĕõÕõĕÅÕåÕõąÅĕÅõąÕ DO NOT WRITE IN THIS MARGIN

9706_m25_qp_32