Financial Management Quiz

What was the turnover of the Gosforth-based used-car supermarket in 2014?

• £10 million

• £15 million

• £23 million

• £30 million

What is an example of a short-term liability?

• Mortgage

• Overdraft

• Long-term loan

• Equity investment

What does shareholders' equity represent?

• The total liabilities of a business

• The assets that will be converted into cash within 12 months

• A summary of what is owed to the owners of the business

• The long-term loans of a business

What are trade creditors?

• Loans and mortgages

• Suppliers of raw materials and components

• Shareholders of a business

• Employees of a business

What is the significance of retained earnings in shareholders' equity?

• They represent the total liabilities of a business

• They are a summary of what is owed to the owners

• They are long-term loans of a business

• They are assets that will be converted into cash

What is the purpose of the table in the document?

• To show the profitability of Kingham plc

• To display the financial position of Kingham plc

• To calculate the tax liabilities of Kingham plc

• To measure the liquidity of Kingham plc

What does an acid test ratio measure?

• Profitability

• Liquidity

• Market share

• Debt levels

What can a low level of working capital indicate?

• High profitability

• Business may be in trouble

• Excess inventory

• Strong market position

What does the term "overborrowing" refer to in a business context?

• Having too much cash

• Having too much debt

• Having too many assets

• Having too many employees

What is the role of inventories in the acid test ratio?

• They are included in current assets

• They are excluded from current assets

• They are added to current liabilities

• They are subtracted from current liabilities