FSs Characteristics for Interpretation Flashcards
1
Q
What are liquid assets?
A
Current assets items that will or could soon be converted into cash
2
Q
What are liquid funds?
A
Cash
Short-term investments
Fixed term deposits with a bank
Trade receivables
Bill of exchange receivable
3
Q
What does a low asset turnover suggest?
A
A capital intensive industry
4
Q
What does high percentage of depreciation mean?
A
That a business has a large amount of non-current assets
5
Q
Effect purchasing inventory on credit has on quick and current ratio?
A
Causes them to decrease
6
Q
What effect does impairment have on capital employed?
A
Causes a decrease, but increases its ROCE
7
Q
What effect does impairment have on gearing?
A
Reduces equity
