Newton
The capital needed by an enterpreneur when first starting a business.
A. start-up capital
B. working capital
C. non-current (fixed) assets
D. capital expenditure
A. start-up capital
The main use of financial statement is to have job security.
A. Shareholders
B. Employees
C. Potential investors
D. Managers
B. Employees
This is included in short-term finance
A. mortgage
B. hire purchase
C. share issue
D. debt factoring
D. debt factoring
... = gross profit - expenses
A. Cost of sales
B. Profit
C. Revenue
D. Total cost
B. Profit
True or False
Micro finance is financing a business idea by obtaining small amounts of capital from a large number of people, most often using the internet and social media networks.
False
Choose or more items included in expenses of shoes company.
1. leather
2. rubber
3. foam
4. electricity
5. advertising
4 and 5
Choose one or more that are included in internal sources of finance.
1. owner's savings
2. retained profits
3. some of non-curent assets such as equipment and machinery
4. overdrafts
1, 2, and 3
Owner's equity is ...
A. the amount owed by the business to its owners; includes capital and retained profits.
B. debts of the business which it expects to pay before the date of the next statement of financial position.
C. debts of the business which will be payable after more than one year.
D. resources that a business owns and expects to use for more than one year.
A. the amount owed by the business to its owners; includes capital and retained profits.
True or false
Debenture is a bond issued by a company to raise long-term finance usually at a fixed rate of interest.
True
Choose one or more that are involved in the working capital cycle:
1. Cash
2. Inventories purchased on credit
3. Production of goods for sale
4. Goods sold to customers on credit
1, 2, 3, and 4
Shanti Company has revenue $100,000 and the total costs are $40,000. The profit is ....
$60,000
Process:
Profit = revenue - total costs
=100,000 - 40,000
= 60,000
These are resources that the business owns and expects to convert into cash before the date of the next statement of financial statement.
Current assets
This stakeholder uses income statement to make them sure that profit is enough to pay interest on loans.
Lender
These mean debts of the business that will have to be paid sometimes in the future.
Liabilities
It refers to selling a product for more than it cost to produce it.
Adding value
It is the ability of a business to pay its short-term debts.
Liquidity
This is a financial statement which records the revenue, costs and profits of a business for a given period of time.
Income statements
It refers to an estimate of the future cash inflows and outflows of a business.
Cash-flow forecast
It is the amount of money owed to the business by customers who have been sold goods on credit.
Trade receivables
Ricky can sell 150 beach hats. The price of one hat is $12. His revenue is ...
$1800
Process:
Revenue = selling price x quantity
= 12 x 150
= $1,800
This is the accounting statement of Rosetine Company
2021 2022
$000 $000
Current assets 50 40
Current assets -inventories: 30 20
Current liabilities 10 5
The current ratio in 2021 is ....
5
Process:
Current ratio = current assets/current liabilities
= 50/10
= 5
This is the financial statement of Alfredo Company
2021 2022
$000 $000
Revenue 500 450
Gross profit: 200 300
Profit before interest and tax 100 175
Capital employed 150 150
The return on capital employed (ROCE) in 2021 is .. %
66,67
Process:
Return on capital employed (ROCE) = profit x 100/ capital employed
= 100 x 100 /150
= 66,67%
This is the financial statement of Grisella Company
2021 2022
$000 $000
Revenue 1200 1300
Gross profit: 1000 1100
Profit before interest and tax 900 900
Capital employed 300 315
The profit margin in 2021 is .. %
75
Process:
Gross profit margin = profit x 100/revenue
=900 x 100/1200
=75 %
This is the financial statement of Vinny Company
2021 2022
$000 $000
Revenue 1000 1500
Gross profit: 800 1300
Profit before interest and tax 600 800
Capital employed 200 180
The gross profit margin in 2022 is .. %
86,67
Process:
Gross profit margin = gross profit x 100/revenue
=1300 x 100/1500
=86,67%
This is the accounting statement of Vinny Company
2021 2022
$000 $000
Current assets 50 40
Current assets -inventories: 30 20
Current liabilities 5 10
The acid test ratio in 2022 is ....
2
Process:
Acid test ratio = current assets - inventories/current liabilities
= (40 - 20)/10
= 2