Higher Business Management Finance

Within which financial document would you find CURRENT LIABILITIES?

• Cash budget

• Cash flow

• Statement of Financial Position

• Income Statement

Which financial statement would list both GROSS PROFIT and PROFIT FOR THE YEAR?

• Cash budget

• Statement of financial position

• Income statement

Items owned by a business such as property or machienry which are unlikely to change or be sold in the next 12 months.

• Non-current liabilities

• Current liabilities

• Non-current assets

• current assets

A reduction in GROSS PROFIT could be caused by... (select all that apply)

• An increase in EXPENSES

• An increase in the COST OF SALES

• A reduction in SALES REVENUE

• A reduction in the COST OF SALES

What is WORKING EQUITY? Select the statements that apply

• Current assets less current liabilities

• Non current assets less non current liabilities

• An indication of how easily a business can pay short-term debt

• An indication of how quickly a business will be paid by its debtors

NON-CURRENT LIABILITIES are...

• Long term debts that a business owes

• A bank overdraft

• Short term debts that a business owes

• Trade receivables

Money owed by a business to its creditors is called "Trade ___________"

This RATIO tells us how able a business is to pay its short-term debts.

• Gross profit ratio

• Current ratio

• Return on Equity Employed

• Rate of inventory turnover

What options might be good advice for a business whose PROFIT FOR THE YEAR RATIO fell from 30% to 25% from one year to the next? Select all that apply

• Reduce expenses by reducing employee numbers

• Increase sales revenue by advertising more

• Reduce cost of sales by finding cheaper supplier

• Increase expenses by hiring more employees

High rate of inventory turnover would tell us that...

• Products are selling quickly and are not stored for long

• Products are selling slowly and are therefore in storage for a while