Role/Sources of Finance

The ability of a business to repay its short term debts as they are due is called

• Liquidity

• Solvency

• Profitability

• Cash flow

The ability of a business to repay its long term debts as is called

• Liquidity

• Solvency

• Profitability

• Growth

If a business does not have enough current assets to pay its current liabilities, which goal are they not reaching?

• Liquidity

• Solvency

• Profitability

• Efficiency

Efficiency is best explained by

• how much output a business gets from its inputs

• how fast a business can fulfil an order

• how quickly the business grows

• how well a business meets customer expectations

A business has increased in efficiency if

• it makes less output with the same inputs

• it makes the same output with more inputs

• it uses less inputs to make the same output

• it uses more inputs to make the same output

A business has found a way to make its products with less waste. Which goal is it achieving?

• Liquidity

• Solvency

• Efficiency

• Profitability

A successful expansion would be an indication of

• growth which improves short term liquidity

• growth which improves short term profitability

• growth which improves long term solvency

• growth at the expense of long term profitability

Which of the following is a short term source of finance?

• Debenture

• Unsecured Note

• Leasing

• Factoring

Which of the following is a short term source of finance?

• Debenture

• Leasing

• Commercial Bill

• Mortgage

Which of the following is a long term source of finance?

• Factoring

• Leasing

• Commercial Bill

• Overdraft