Assesing Competitiveness Flashcards
What is the Statement of comprehensive income/ profit and loss account?
A document which shows whether the business is in a profit or loss during the year
What are the key parts on the profit and loss account?
- Revenue
- Gross profit
- Expenses
- Operating profit
What is revenue?
Quantity x price
What is gross profit?
Revenue - cost of sales
What are expenses?
Costs of the business that don’t have anything to do with stock or the making of the product
Eg. Advertisement
What is Operating profit?
Gross profit - expenses
What are the interest of shareholders?
Want to know the final profit figure which dividends will be paid out on
What are the interests of investors?
Want to know the profitability of the company to know wether it’s worth investing in
What is the statement of financial position/balance sheet?
A document which shows what the business owns and owes on one day of the year
What is the key infomation on a balance sheet?
- Current assets
- Non-current assets
- Current liabilities
- Non current liabilities
What are current assets?
Items that the business owns that will pay the business in under a year
Eg. Stock
What are non-current assets?
Items a business owns but will pay the business back after a year
Eg. Machinery
What are long term liabilities?
Items a business needs to pay but is not due for total payment within a year
What is a ratio in terms of business?
A ratio measure a company’s ability to meet financial obligations
What is the current ratio formula?
Current assets / Current liabilities
