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WorksheetsAO Finances and accounts
Total questions: 38
Worksheet time: 23mins
The role of finances
Can be characterized as either capital expenditure or revenue expenditure.
Upgrading its capital equipment or to funding its expansion plans
Need to various sources of finance to pay for their operational / daily cos
Internal sources of finance
Trade credit
Personal funds
Loan
Retained profit
Sale of assets
Appropriate sources of finance for Meghan's food truck to purchase a new stove.
Issuing shares to have funds
Overdrafts and other forms of short-term finance
Retained profits and the sale of assets
Fixed costs
Comission
Raw material
Subscription
Revenue streams for Disney
Technology
Plants and flowers
Final accounts are the published accounts of an organization, made available to and used by different stakeholders
True
False
Balance sheet
None
Profit and loss account
None
Cash flow forecast
None
Type of intagible assets
Buildings
Knowledge
What is depreciation?
The shrink of a product
Fall in the value of a non-current asset
What I have for being an IB student
The emotional state of a being
Synonyms of Residual value
Value of garbage
Waste value
Scrap value
Salvage value
Select all correct for: Gross profit margin
Measures an organization’s gross profit expressed as a percentage of its sales revenue
Indicator of how well a business can manage its direct costs of production
Found in Profit and Loss account
Found in Gross Statement
Select all correct for: Profit Margin ratio
Profit margin = (Profit before interest and tax / Sales revenue) × 100
Measure profit against the costs
Indicates financial surplus
For every $1 the firms has [x] in margin
Select all correct for: ROCE
Selling unproductive, unused, underused, and obsolete assets
Return on capital employed
Profitability ratio
Capital employed = Non‐current liabilities + Equity
Select all correct for: Current ratio
Found in Balance Sheet
Includes liabilities
Profitability ratio
Measures the valua of an organization againts its sales
Select all correct for: Acid test
This is not a ratio
Measure an organization’s ability to pay its short-term debts without stock
Has to be no less than 1
Could measure liquidity problems
Stock turnover ratio
None
Creditor days ratio
None
Gearing ratio
None
Liquidity ratio
None
Refers to the situation where a person or a business is unable to meet their bill and other debt obligations. The debts (liabilities) of the individual or organization exceed their assets. The situation, if not managed effectively, can result in legal action being taken against the insolvent individual or business, with assets being liquidated (seized and sold) to pay off as much of the outstanding debts as possible.
Bankruptcy
Insolvency
Refers to the movement of an organization’s cash inflows and cash outflows
(a)
Value of goods and/or services sold to customers. PxQ
(a)
Value of sales revenue after all costs have been accounted for. This is the money that the business earns.
(a)
Refers to cash or other liquid assets available to an organization for its daily operations
Working capital
Intagible assets
Cash
Best fit for liquidity
Examples of cash flow problems
Investment for buying 3D printers. Which is the best option?
Investment: $200k
PBP: 2years
Investment: $300k
PBP: 1 year
Investment: $100k
PBP: 5 years
Investment for buying new computer system. Which is the best option?
Investment: $200k
ARR: 5.36%
Investment: $300k
ARR: 31%
Investment: $100k
ARR: 1.2%
What is this?
Net Present Value (NPV)
Quantitative value of the overall financial return
Discount factor
A figure that never changes
Best fits: Cost centre
Budgets limitations
Allocate resources
Time consuming
Managing tool
Control over costs
The point showed in the picture is...
Profit
BEP
BEQ
Fixed costs
None
The grey area showed in the picture is...
Profit
Break-even quantity
Loss
Fixed costs
None
The red dotted line in the picture is...
Total costs
Variable costs
Loss before break-even
Fixed costs
Revenue minum
Burgers for $12 each and unit variable costs of $6. Calculate contribution
$6
$12
1.2%
None of the previous
Burgers contribution $4. Units sold 100. Calculate total contribution
$400
$104
$96
4%
