Cashflow

What is the purpose of a cash flow forecast?

• To predict the movement of money into and out of a business bank account

• To calculate the net worth of a business

• To measure the profitability of a business

• To analyze the liquidity of a business

What does the term 'inflows' refer to in the context of cash flow?

• Money owed by the business

• Money received by the business

• Money invested in the business

• Money paid out by the business

What is the formula to calculate the gross profit margin?

• (cost of sales / gross profit) × 100

• (gross profit / cost of sales) × 100

• (revenue / gross profit) × 100

• (gross profit / revenue) × 100

What is the purpose of a statement of comprehensive income?

• To calculate the net worth of a business

• To summarize everything the business owns and owes

• To report on the company’s assets and liabilities

• To measure the profitability of a business

What are non-current assets?

• Items of value that are likely to stay within the business for over a year

• Items of value that can fluctuate in value on a regular basis

• Items of value that the business can turn into assets within one year

• Items owed by the business that should be paid back in under one year

What is the calculation for the profit of the year in the statement of comprehensive income?

• Profit or loss for the year = gross profit – expenses + other income

• Gross profit – expenses = other revenue income

• Gross profit = sales revenue – costs of goods sold

• Costs of goods sold = opening inventory + purchases – closing inventory

What is the formula to calculate return on capital employed (ROCE)?

• (capital employed / revenue) × 100

• (revenue / capital employed) × 100

• (capital employed / profit) × 100

• (profit / capital employed) × 100

What is the purpose of ratio analysis?

• To compare one figure to another in a more meaningful way

• To measure the profitability of a business

• To predict the movement of money into and out of a business bank account

• To calculate the net worth of a business

What are current liabilities?

• Items of value that are likely to remain within the business for over a year

• Items of value that can fluctuate in value regularly

• Items of value that the business can convert into assets within one year

• Items owed by the business that should be paid back in under one year

What is the calculation for net current assets/liabilities?

• Current liabilities - Current assets

• Non-current liabilities - Non-current assets

• Current assets - Current liabilities

• Non-current assets - Non-current liabilities