HBM - Statement of Financial Position (Part 2)

HBM - Statement of Financial Position

Part 2

What can you remember from last lesson...?

Reorder

Correct order for headings in the Statement of Financial Position

• Non-current assets

  Current assets

  Current liabilities

• Working Equity

  Net Assets Employed

• Non-current liabilities

• Net Assets

• Equity & Reserves

1

2

3

4

5

• 1
• 2
• 3
• 4
• 5

Categorize

Options (9)

factory

lorries

machinery

cash at the bank

trade recievables

bank overdraft

closing inventory

bank loan

trade payables

Organise these options into the right categories

Non-current assets

Current assets

Current liabilities

Non-current liabilities

Multiple Select

Which of the following is true of a Statement of Financial Position? (choose all that apply)

• informs decision-making

• shows the profit from buying and selling

• shows the items the business owns and owe

• shows where a business may have surpluses

Multiple Choice

Inventory is an example of a...

• Non-current asset

• Current asset

• Current liability

• non-current liability

Multiple Choice

Net assets employed =

• non-current assets +/- working equity

• sales revenue - cost of sales

• current assets - current liabilities

• opening balance + receipts - payments

Multiple Choice

Net assets = ???

• Equity & reserves

• Closing balance

• Profit for the year

• Working equity

• Current assets - current liabilities

Multiple Choice

A bank loan would be an example of a...

• Non-current asset

• Current asset

• Current liability

• Non-current liability

Purpose of a SoFP

• A statement of financial position shows the overall value of the business. It is a legal requirement for all limited companies to prepare a statement of financial position

• Investors and potential investors can use a statement of financial position to determine whether they will get a good return on their investment.

• Suppliers and creditors can use it to determine the level of risk involved in lending or supplying to the business

• A statement of financial position can be used to analyse ratios which can be compared with previous years or those of competitors. This will better aid future decision-making

• A statement of financial position can be used to show the value of all current assets, non-current assets, liabilities and non-current liabilities (max 1)

Drag and Drop

Investors and potential investors can use a ​

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to determine whether they will get a good return on their​

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.





It can be used to analyse ​

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which can be compared with previous years or those of ​

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. This will better aid future​

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.

Drag these tiles and drop them in the correct blank above

statement of financial position

cash budget

income statement

competitors

decision-making

investment

ratios

formulae

recruitment

Multiple Select

Which of following is true about liquidity? (choose all that apply)

• shows if we have enough debts to cover assets

• shows if we have enough assets to cover debts

• cash is very 'liquid'

• inventory is most 'liquid' current asset

• all non-current assets are classified as 'liquid'

Multiple Choice

Using the SoFP we can analyse the organisation's ability to pay its debts.

• true

• false

Multiple Choice

Describe a piece of financial information contained in an Income Statement.

• Cost of sales - this is the amount it has cost the business to produce their goods. 

• Receipts - this is the predicted amount of money a business expects as an inflow of cash into the business.

• Working equity - this shows the ability of a business to pay its long term debts.

• Net Assets - these are items owned by a business for a period of more than one year.

• Net assets employed - this is the value of non-current assets added to the working equity figure.

Task - Debbie's Deli (Page 135)

Open Ended

Type answers in here:

Hotspot

Equity & Reserves

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Current Assets

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Net Assets

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Non-current assets

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Current liabilities

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Working equity