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Subjects · Leaving Cert Accounting

Leaving Cert Accounting: Ratios — profitability

How often Ratios — profitability 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 — profitability, Higher Level(6 marks)

Quick ones on Ratios — profitability.

(a)The gross profit margin is…
  1. Gross profit ÷ cost of sales × 100
  2. Gross profit ÷ sales × 100
  3. Net profit ÷ sales × 100
(b)The mark-up is…
  1. Sales ÷ cost of sales × 100
  2. Gross profit ÷ sales × 100
  3. Gross profit ÷ cost of sales × 100
(c)Return on capital employed is…
  1. Profit before interest ÷ capital employed × 100
  2. Profit after interest and tax ÷ total sales × 100
  3. Net profit after tax ÷ total sales × 100
Show the answers

(a) Gross profit ÷ sales × 100

(b) Gross profit ÷ cost of sales × 100

(c) Profit before interest ÷ capital employed × 100

Your turn: Higher Level questions on Ratios — profitability.

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 — profitability questions

Ratios — profitability, 2 marks

Sales €200,000; net profit €16,000. Net margin?

  1. 12.5%
  2. 16%
  3. 8%
Show the answer

8%

€16,000 ÷ €200,000 × 100 = 8%: 8c of net profit for every €1 of sales.

Ratios — profitability, 2 marks

Return on ordinary shareholders' funds uses profit after…

  1. Cost of sales and expenses only
  2. Tax and preference dividends
  3. Interest only, before tax
Show the answer

Tax and preference dividends

It measures the return to ordinary shareholders: profit after tax and preference dividends ÷ ordinary shareholders' funds.

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 — profitability questions

Ratios — profitability, 3 marks

Gross profit €30,000; sales €120,000. Gross profit percentage?

  1. 33.3%
  2. 4%
  3. 25%
Show the answer

25%

Gross profit % = gross profit ÷ sales × 100 = €30,000 ÷ €120,000 × 100 = 25%.

Ratios — profitability, 2 marks

For return on capital employed, capital employed = shareholders' funds + …

  1. Closing stock at cost
  2. Long-term liabilities (e.g. debentures)
  3. Current liabilities (e.g. creditors)
Show the answer

Long-term liabilities (e.g. debentures)

Capital employed is all long-term finance: share capital + reserves + long-term loans such as debentures.

Ratios — profitability, 3 marks

Gross profit percentage 40%; sales €200,000. Gross profit?

  1. €80,000
  2. €120,000
  3. €5,000
Show the answer

€80,000

Gross profit = 40% × €200,000 = €80,000. Cost of sales would be €200,000 − €80,000 = €120,000.

Other Accounting topics

All of Leaving Cert Accounting