Year 10 Business Revision

What are the types of debt finance?

• Bank loan, credit card, leasing, overdraft, trade credit

• Bank loan, credit card, self-funding, leasing

• Bank loan, credit card, overdraft, private investment

• Bank loan and credit card

What are the types of equity finance?

• Self-funding, private investors, credit card, venture capitalist

• Self-funding, private investors, venture capitalists, crowdfunding

• Private investors, leasing, overdraft

• Self-funding and crowdfunding

The financial objectives of a business include

• Profitability, liquidity, solvency, growth and efficiency

• Profitability, liquidity, solvency, growth and income

• Liquidity, solvency, growth and income

• Profit and growth

Which financial objective refers to the businesses ability to meet their long-term debt and financial obligations?

• Profitability

• Liquidity

• Solvency

• Growth

Which financial objective refers to how easy assets can be turned into cash to meet the short-term cash flow obligations of a business?

• Profitability

• Liquidity

• Solvency

• Growth

What is a disadvantage of self-funding?

• You retain full ownership control of the business

• Easiest and quickest source of finance

• Don’t need to pay back interest to lenders

• Could put a strain on your personal and family life

What is an advantage of a bank loan?

• Businesses need meet a range of requirements before being accepted for the loan

• Repayment burden

• Requires a partial funding requirement

• Has lower interest rates compared to credit cards

What is Net Profit?

• Total sales revenue less the costs of goods sold

• Gross profit less all other operating expenses

• The assets of a business less the liabilities

• The total sales revenue less interest

The Debt Ratio measures?

• How much of the businesses assets are funded by the owner

• How much money the business has borrowed from the bank

• How well the business is doing

• How much of the businesses assets are funded by debt

What does a poor Net Profit Ratio indicate?

• The business has significant expenses, and a low volume of sales

• The business has very few expenses

• the business is making a large volume of sales

• The business has a large volume of sales and very few expenses