Finance

Question 1

Sources of finance

Answer 1

Personal finance
retained profits
sales of assets
share issue
debt factoring
bank loan

Question 2

long term sources of finance

Answer 2

mortgage
debentures
sell and lease back
trade credit

Question 3

factors affecting sources of finance

Answer 3

short term required
long term required
interest rates
payback term

Question 4

purpose of cash budgeting

Answer 4

(surplus/defict)
allow investment plans
allow action to prevent a deficit

Question 5

problem = solution

Answer 5

money tied up in stock = JIT
many credit sales =. cash discounts
expense costs increasing = reduce expenses
unpaid debts = sell to debt factories

Question 6

users of financial statements

Answer 6

owners
employees
hmrc
trade unions
investors

Question 7

income statement

Answer 7

cost of sales
sales revenue
gross profit
expenses
profit for the year

Question 8

sofp

Answer 8

NCA, CA, CL, working equity, net assets employed, NCL, net assets,equity

Question 9

ratio analysis purpose

Answer 9

compare performance
compare to other businesses
compare industry averages
highlight trends for future decision making.