Finance for Business Quiz

What are the costs involved in setting up and running a business?

• A. Only operating costs

• D. Only variable costs

• B. Only fixed costs

• C. Both start-up costs and operating costs

What is the formula to calculate Sales Revenue?

• D. Total Costs - Fixed Costs

• C. Total Costs / Quantity

• B. Quantity x Selling Price per Unit

• A. Quantity x Cost Price per Unit

What is the breakeven point?

• D. When the business is bankrupt

• C. When the business is making a loss

• B. When the business is not making a profit or a loss

• A. When the business is making a profit

What is the calculation for Breakeven?

• A. Fixed Costs / (selling price - variable cost per unit)

• B. (selling price - variable cost per unit) / Fixed Costs

• C. (selling price + variable cost per unit) / Fixed Costs

• D. Fixed Costs x (selling price - variable cost per unit)

What is the main purpose of budgeting for a business?

• A. To predict the profit for the business

• D. To set targets for spending and revenue over a future period of time

• B. To ensure the business is in control of their revenue and expenditure

• C. To compare budgeted figures with actual figures

What does the Income Statement show?

• A. The money the business owes to others

• B. The profit or loss a business has made

• C. What the business owns and is owed to them

• D. How much money a business will spend over a period of time

What is the formula to calculate Gross Profit?

• B. Revenue + Cost of Goods Sold

• A. Revenue - Cost of Goods Sold

• C. Revenue / Cost of Goods Sold

• D. Revenue x Cost of Goods Sold

What does the Liquid Capital Ratio measure?

• A. How much money the business owes in short-term debt

• B. How much money the business has in liquid assets

• C. How well the business is doing

• D. How much money the business has invested into the business

What is the main purpose of a Cashflow forecast?

• B. To show how the money invested in the business has been spent

• A. To predict the profit for the business

• C. To predict if a business will have enough money to pay its debts

• D. To compare budgeted figures with actual figures

What are the two main financial statements that help managers assess how successful the business has been?

• D. Gross Profit Margin and Net Profit Margin

• A. Income Statement and Statement of Financial Position

• B. Cashflow forecast and Budgetary Control

• C. Revenue Budget and Expenditure Budget