unit 6 - finace

Question 1

sources of finance.

Answer 1

-friends/family.
-retained profits.
-sale of assets.
-loan/mortgage.
-overdraft.
-trade credit.
-hire purchase.
-grants

Question 2

solutions to cash flow problems.

Answer 2

-re-scheduling payments.
-cutting costs.
-increase sales.
-new sources of finance.

Question 3

what are cashflow forecasts?

Answer 3

they allow the businesses to predict if they are likely to have an cash flow problems in the future or not.

Question 4

how to calculate the average rate of return?

Answer 4

average profits per year
——————— x100
initial costs

Question 5

what is the margin of safety?

Answer 5

something that protects someone by making it possible for there to be an amount of risk or a number of mistakes without having a very damaging effect.

Question 6

what is an income statement?

Answer 6

shows the profit or loss of a business.

Question 7

what is a statement of financial position?

Answer 7

shows the assets and liabilities of a business.

Question 8

what is a liability?

Answer 8

debts the business owns.