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Subjects · Leaving Cert Accounting

Leaving Cert Accounting: Ratios — efficiency

How often Ratios — efficiency comes up on the Accounting papers, every year it was asked, and questions to try.

HL Asked on 10 of the last 10 Higher Level papers, most recently in 2026. banker

OL Asked on 10 of the last 10 Ordinary Level papers, most recently in 2026. banker

Ratios — efficiency, Higher Level(6 marks)

Quick ones on Ratios — efficiency.

(a)The rate of stock turnover is…
  1. Average stock ÷ cost of sales
  2. Cost of sales ÷ average stock
  3. Gross profit ÷ average stock
(b)The debtors' collection period (days) is…
  1. Trade debtors ÷ credit purchases × 365
  2. Credit sales ÷ trade debtors × 365
  3. Trade debtors ÷ credit sales × 365
(c)The creditors' payment period is based on…
  1. Credit purchases
  2. Net profit
  3. Credit sales
Show the answers

(a) Cost of sales ÷ average stock

(b) Trade debtors ÷ credit sales × 365

(c) Credit purchases

Your turn: Higher Level questions on Ratios — efficiency.

Higher Level

Asked on 10 of the last 10 Higher Level papers, most recently in 2026. banker

Every paper, year by year

YearWhere it came up
2026Q5
2025Q5
2024Q5
2023Q5
2022Q5
2021Q5
2019Q5
2018Q5
2017Q5
2016Q5

Links open the State Examinations Commission’s paper for that year.

More Ratios — efficiency questions

Ratios — efficiency, 2 marks

Trade creditors €20,000; credit purchases €146,000. Payment period?

  1. 73 days
  2. 20 days
  3. 50 days
Show the answer

50 days

€20,000 ÷ €146,000 × 365 = 50 days on average to pay suppliers.

Ratios — efficiency, 2 marks

Paying creditors much faster than debtors pay the firm harms its…

  1. Gross margin
  2. Liquidity
  3. Gearing
Show the answer

Liquidity

Cash goes out to suppliers before it comes in from customers, which can leave the firm short of cash.

Ordinary Level

Asked on 10 of the last 10 Ordinary Level papers, most recently in 2026. banker

Every paper, year by year

YearWhere it came up
2026Q5
2025Q5
2024Q5
2023Q5
2022Q5
2021Q5
2019Q5
2018Q5
2017Q5
2016Q5

Links open the State Examinations Commission’s paper for that year.

More Ratios — efficiency questions

Ratios — efficiency, 3 marks

Cost of sales €160,000; average stock €20,000. Rate of stock turnover?

  1. 4 times
  2. 0.125 times
  3. 8 times
Show the answer

8 times

Stock turnover = cost of sales ÷ average stock = €160,000 ÷ €20,000 = 8 times a year.

Ratios — efficiency, 3 marks

Trade creditors €15,000; credit purchases €90,000. Period of credit received from creditors?

  1. 1.5 months
  2. 2 months
  3. 6 months
Show the answer

2 months

Creditors ÷ credit purchases × 12 = €15,000 ÷ €90,000 × 12 = 2 months.

Ratios — efficiency, 2 marks

Rate of stock turnover measures…

  1. How quickly stock is sold
  2. The profit made on stock
  3. The value of stock at the year end
Show the answer

How quickly stock is sold

It is an efficiency (activity) ratio: how many times a year the average stock is sold and replaced.

Other Accounting topics

All of Leaving Cert Accounting