Week 15 part 2 summary sheet questions

Why do businesses produce financial documents?

• To comply with legal requirements for Ltds and PLCs

• To decorate their offices

• To advertise their products

• To create more paperwork for employees

What is one reason managers are interested in assessing the performance of a business?

• To reduce their own salaries

• To motivate themselves if the business is performing well

• To decide which new products to launch

• To plan their vacations

What might employees demand if the statement of comprehensive income shows increased profits?

• A wage decrease

• More vacation days

• A wage increase

• Less working hours

What would owners of small businesses look at to decide whether to continue with the business?

• The statement of comprehensive income

• The company's brand logo

• The number of employees

• The office locations

What are banks interested in when deciding whether to lend money to a business?

• The hobbies of the business owner

• The company's social media presence

• The ability of a business to repay the loan with interest

• The color scheme of the business's branding

What is the definition of creditworthiness?

• The ability to create a business plan

• The ability to repay a loan

• The ability to hire employees

• The ability to market products

What type of information do managers use to make key decisions?

• Qualitative information

• Quantitative information

• Arbitrary information

• Historical information

For what purpose might a business use information about current assets and liabilities?

• To calculate liquidity ratios for short-term funding decisions

• To decide on new marketing strategies

• To evaluate employee performance

• To design new products

What financial statement can be used to determine the most appropriate type of funding for expansion?

• Statement of comprehensive income

• Statement of financial position

• Cash flow statement

• Income statement

How can a business use the statement of comprehensive income to reduce costs?

• By comparing the gross profit margin and operating profit margin over time

• By increasing the price of products

• By hiring more staff

• By expanding to new markets