Sources of Finance
Is the recreation of stock material short term or long term investment ?
Short term
What are ratios?
Measures to evaluate the health of a company
What is the break even quantity?
The quantity at which the company does not win or loose any money
What is the final result of the income statement?
Retained profit
What is the difference between cash inflow and cash outflow ?
The liquidity entering or leaving the company
What is the difference between capital expenditure and revenue expenditure ?
Capital expenditure = long term investment
Revenue expenditure = short term investment
What are the two liquidity ratios?
What is the formula for break even?
The creditors are...
How is calculated the net cash flow ?
Total cash in- total cash out
What is the difference between the gross profit margin and the net profit margin ?
Net profit margin = Takes into account all production costs
If the company has a $100 fixed costs, sells its products at $7 and has a variable cost per product or $2, how much is the break even quantity?
20 products
What is the composition of Equity?
Share capital
retained profit
Receiving a notification of payment of taxes by the end of the month is...
Not registered in the cash flow
Name at least 5 of the 7 external sources of finance
Bank loan - Purchase and hiring - Bank overdraft - Equity - Debt - Trade credit - Debt factoring
If the ROCE of a company is 75%, what is the interpretation of it ?
75% of the capital invested is transformed into net profit before interests and taxes
If the target profit level of output is 250, what is its interpretation?
How can you make sure your balance sheet is right ?
When net asset (total asset- total liabilities) = equity
What is the method of average rate of return ?
The rate at which a company gets the return on the investment (at which it is paid back)
What are the 5 reasons for which capital is used?
Expansion capital
Set up capital
Research&development
Working capital
Special situations
What are 3 strategies to improve the liquidity ratios?
Sell inventory
Sell fixed assets
Increase loans
What are the 5 steps to construct the Break even graph ?
1- Draw the fixed costs line
2- Draw the variable cost line
3- Draw the total cost line
4- Draw the revenue line
5- Indicate the intersection between the total cost line and revenue line
What are the elements of the income statement after net profit before interests and taxes?
interests
Net profit before taxes
Taxes
Net profit after interests and taxes
Dividends
Retained profit
What are 3 strategies to reduce cash outflow ?
Delay payments to suppliers or creditors
Using leasing purchase instead of buying ç
Cut production spending: direct or indirect