Grade 10 Finance Function

Grade 10 Finance Function

Term 3 202​5

Plan for working capital requirements
short term financial planning

Cash Budget

Plan for fixed capital requirements
Eg. Land & Buildings, Vehicles, Equipment

Capital Budget

BUDGETING

Multiple Choice

Is Finance one of the eight business functions of a business?

• Yes.

• No.

Selling on Credit

Is it good or bad?

​A business that focuses on profit will harm the environment and other stakeholders.

Poll

Have you heard of the TRIPLE BOTTOM LINE?

• Yes

• No

Multiple Choice

SUSTAINABLE REPORTING

Which three factors does the Triple bottom line look at? 

• Product, Place, People.

• People, Process, Planet.

• People, Planet, Profit.

Open Ended

Why do you think sustainable reporting is important?

Does it serve a purpose?

​Financial Statements

​Statement of Comprehensive Income

​Statement of Financial Position

​Pages 100 and 101 in Textbook

What is the difference between these two FS.​

​

Multiple Choice

The Statement of Comprehensive Income is used to calculate the __ for the year.

• Money

• Income

• Net Profit

Multiple Choice

The Statement of Financial Position shows the relationship between ...

• Assets, Owners' Equity and Liabilities

• Income and Expenses

Multiple Choice

What is this?

• Balance Sheet

• Statement of Comprehensive Income

• Statement of Cash Flow

Open Ended

What are the TWO possible sources of capital an Entrepreneur has?

OWN CAPITAL vs. BORROWED CAPITAL​

​

OWN CAPITAL

​Own capital is the investment made by the owner of the business.

1. ​Sole Trader - will contribute their own savings

2. ​Partnership - 2 to 20 Partners will contrbute and share profits depending on agreed %

3. ​Company - sells shares to shareholders (entitled to dividends based on shareholding)

​BORROWED CAPITAL

• ​Borrowed capital is any money that the business borrows.

• Creates a Liability for the business.

• ​Can be short-term (credit market) or long term (capital market).

• ​

• NB! if money is borrowed, not only the loan amount must be repaid, but also interest.

Multiple Choice

Own Capital is a(n) _ made the owner(s) of the business.

• donation

• contribution

• investment

Multiple Choice

Borrowed capital creates a _ for the business.

• Asset

• Liability

• Income

Factors to consider when deciding on type of capital

1. The finance period and the nature of the assets bought

   • long term assets should be financed using own capital​

2. Urgency

   • how urgently do you ne​ed the funds

3. ​Control

   • how much control do you want to have in the business​

4. Solvency​

   ​

Business Studies Grade 10

Finance Function

Multiple Choice

The SOLVENCY RATIO is:

• TOTAL ASSETS:TOTAL LIABILITIES

• CURRENT ASSETS:CURRENT LIABILITIES

Multiple Choice

Which of the following a source of working capital?

• Sales of shares

• long-term loans

• mortgage bond

• bank overdraft

Types of Capital

1. Long-term

2. ​Short-term

   • overdraft

   • short-term loan

   • credit card

   • trade credit

   • installment sale transactions​

   • leases

Business Studies | Grade 10