Lesson 2.11.1

2.11.1 Measures of performance: financial and non-financial Quiz: OCR Business, Unit 2

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 2.11.1, Measures of performance: financial and non-financial: 20 multiple choice questions for the OCR Business (H431), Unit 2: Business objectives and strategy, written with Revision Ninja.

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The 20 questions

  1. Which formula is used to calculate Return on Capital Employed (ROCE)?

    • Gross profit ÷ revenue
    • Operating profit ÷ capital
    • Net profit ÷ assets
    • Revenue ÷ capital

  2. Which of the following is classified as a non-financial measure of performance?

    • Labour turnover
    • Return on capital
    • Gearing ratio
    • Operating profit margin

  3. A factory produces 8,000 units with a maximum capacity of 10,000 units. What is capacity utilisation?

    • 80%
    • 70%
    • 125%
    • 20%

  4. Why might a business with a gearing ratio above 50% face financial danger during recession?

    • Reduced unit costs
    • High interest obligations
    • High cash inflows
    • Low dividend payments

  5. How is the current ratio calculated to assess a firm's liquidity?

    • Total assets ÷ liabilities
    • Current liabilities ÷ assets
    • Current assets ÷ liabilities
    • Non-current assets ÷ liabilities

  6. A firm has £50,000 current assets, £10,000 inventory, and £20,000 current liabilities. What is the acid test ratio?

    • 2:1
    • 2.5:1
    • 3:1
    • 0.5:1

  7. How is the rate of labour turnover calculated within a business?

    • (Total staff ÷ leaving) × 100
    • (Days absent ÷ staff) × 100
    • (Staff leaving ÷ staff) × 100
    • (Staff joining ÷ staff) × 100

  8. What is a direct financial consequence of operating at very low capacity utilisation?

    • High labour turnover
    • High gross profit
    • High unit costs
    • Low fixed costs

  9. Which formula calculates the gross profit margin of a business?

    • (Gross profit ÷ revenue) × 100
    • (Net profit ÷ revenue) × 100
    • (Revenue ÷ gross profit) × 100
    • (Gross profit ÷ assets) × 100

  10. A workforce of 20 employees produces 500 units per week. What is labour productivity per employee?

    • 40 units
    • 25 units
    • 10 units
    • 100 units

  11. Which indicator is primarily used to measure quality performance in a manufacturing business?

    • Market growth
    • Scrap rate
    • Gearing ratio
    • Acid test ratio

  12. Which framework combines financial and non-financial metrics across four business perspectives?

    • Boston Matrix
    • Kaplan and Norton
    • Ansoff Matrix
    • Porter Strategic Grid

  13. A firm earns £2m operating profit from £10m capital employed. What is its ROCE?

    • 20%
    • 50%
    • 5%
    • 12%

  14. Which non-financial metric best assesses a firm's progress towards environmental sustainability targets?

    • Acid test ratio
    • Carbon footprint
    • Dividend yield
    • Market share

  15. How is the absenteeism rate calculated for a business's workforce?

    • (Hours worked ÷ staff) × 100
    • (Days absent ÷ days) × 100
    • (Days worked ÷ days) × 100
    • (Staff leaving ÷ days) × 100

  16. A business is highly geared when debt capital forms what proportion of capital employed?

    • Under 25%
    • Exactly 100%
    • Over 10%
    • Over 50%

  17. A firm generates sales of £3m in a total market worth £15m. What is its market share?

    • 25%
    • 20%
    • 5%
    • 15%

  18. Why is the acid test ratio considered a more stringent test of liquidity than current ratio?

    • It includes liabilities
    • It excludes cash
    • It excludes inventory
    • It excludes receivables

  19. Which non-financial measure best evaluates how quickly a business turns raw materials into finished goods?

    • Lead time
    • ROCE
    • Current ratio
    • Labour turnover

  20. In Kaplan and Norton's Balanced Scorecard, which metric fits the customer perspective?

    • Manufacturing cycle time
    • Operating profit margin
    • Employee turnover rate
    • Customer retention rate

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