Business Finance Revision Quiz

What is a source of new capital for a public company?

• 1. Primary market of the Australian Securities Exchange

• 1. Secondary market of the Australian Securities Exchange

• 1. Primary market of the Australian Securities and Investment Commission

• 1. Secondary market of the Australian Securities and Investment Commission

What is a characteristic of external equity finance?

• 1. Specific maturity date

• 1. Low interest payments

• 1. Fixed returns to owners

• 1. Diluted business ownership

What is the net profit ratio (net profit ÷ sales) for 2014?

• 10%

• 20%

• 25%

• 47%

Which of the following describes the change in gross profit ratio and expense ratio from 2014 to 2015?

• Gross Profit Ratio: Improved. Expense Ratio: Improved

• Gross Profit Ratio: Improved. Expense Ratio: Worsened

• Gross Profit Ratio: Worsened. Expense Ratio: Improved

• Gross Profit Ratio: Worsened. Expense Ratio: Worsened

Which of the following would be the focus of a business aiming to reduce expenses?

• 1. Changing task design

• 1. Differentiating its product

• 1. Establishing cost leadership

• 1. Developing quality expectations

Solvency is the ability of a business to

• 1. maximise its profits.

• 1. increase its market share.

• 1. meet its long-term financial commitments.

• 1. meet its short-term financial commitments.

What is the opening cash balance for April?

• -$24 000

• -$18 000

• -$16 000

• -$12 000

If Steve is a sole trader, how much equity does he have in the business?

• $12 800

• $35 500

• $135 500

• $146 00

The current ratio (current assets ÷ current liabilities) for this business is

• too high

• acceptable

• dangerously low

• unable to be calculated

Which of the following is an example of a unit trust?

• 1. An investor purchases shares in a public company

• 1. Investors lend money directly to businesses and receive interest in return.

• 1. Investors pool their money together and it is invested in the property market.

• 1. An investor deposits money with a financial institution and receives a fixed rate of

     interest.