Business Finance Concepts Assessment

The video is a live stream session designed to help Unit 3 students prepare for their assessment. It covers various topics in business finance, including capital income, debentures, current assets, prepayments, invoice discounting, and amortization. The session also explores the advantages of crowdfunding and provides a review of key financial formulas and calculations. A case study involving a pizza business is used to apply these concepts in practical scenarios.

What is the primary purpose of this live stream session?

• To prepare students for a football match

• To discuss personal finance exclusively

• To help Unit 3 students get ready for their assessment

• To cover all topics in business studies

Which of the following is a type of capital income?

• Commission received

• Cash sales

• Credit sales

• Money invested by the owner

What is a debenture?

• A type of loan issued by a business

• A type of crowdfunding

• A type of loan issued by a bank

• A type of leasing

What does amortization relate to?

• Tax paid on profits

• Reduction in the value of a patent

• Annual cost of a higher purchase agreement

• Interest cost of a loan from the bank

Why might high trade payables days be a problem for a business?

• It indicates the business is paying suppliers too quickly

• It can damage relationships with suppliers

• It shows the business has too much cash

• It means the business is not making enough sales

What is one advantage of crowdfunding for a business?

• It helps build relationships with customers

• It requires repayment with interest

• It is a form of debt financing

• It is only available for large businesses

How is the gross profit margin calculated?

• Gross profit divided by cost of sales

• Net profit divided by sales revenue

• Gross profit divided by sales revenue

• Net profit divided by cost of sales

What does the liquid capital ratio exclude from current assets?

• Trade receivables

• Inventories

• Cash

• Prepayments

What is the formula for calculating the margin of safety?

• Sales revenue divided by variable costs

• Actual output minus break-even output

• Break-even output minus actual output

• Fixed costs divided by contribution per unit

What does inventory turnover measure?

• The cost of sales divided by average inventory

• The amount of inventory held at the end of the year

• The number of times inventory is sold and replaced over a period

• The sales revenue divided by average inventory