Business Year 2

The pound sterling has strengthened in value over the past year. Explain the impact of this on the reported profits of a multinational business which has its registered office in London.

(3 marks - will be marked later)

A leading department store chain has published its latest annual report and accounts. Using this document a business analyst calculates that this business has a current ratio of 3:1. Explain whether the analyst views this as a favourable result.

(4 marks - will be marked later)

Long-term loans, in 2014, were 25% less than long-term loans in 2013. 2014 operating profit is £500,000 more than 2013 operating profit. Which are correct?

• 2014 Long-term loans £12,000,000 and 2014 operating profits £8,100,000

• 2014 Long-term loans £11,800,000 and 2014 operating profits £8,100,000

• 2014 Long-term loans £12,200,000 and 2014 operating profits £8,500,000

• 2014 Long-term loans £12,500,000 and 2014 operating profits £7,900,000

Coca-Cola aims to ‘refresh the world – in body, mind and spirit’. This declaration is Coca-Cola’s:

• tactic

• objective

• strategy

• mission

Which one of the following is not a suitable corporate objective? By the end of 2018 a business intends to:

• achieve a turnover of at least £2bn (an increase of 25%)

• become the best car maker in the UK

• increase the customer base by 20%

• restore return on capital employed (profitability) back to 18%

Core competencies of a business are unlikely to include:

• reputation for quality

• existing strengths

• centralised assets

• knowledge and skills

Population change is called:

• datagraphic change

• dictocratic change

• democratic change

• demographic change

Which of the following would not appear on an income statement for a furniture retailer that offers customers credit terms on all sales throughout the year?

• administrative expenses

• payables

• interest payable

• profit for the year

Seen on a balance sheet, ‘reserves’ are:

• capital

• current assets

• cash

• inventory

To calculate the financial ratio known as ‘payables days’ the best formula is: