Statement of financial position (2) Flashcards
You can find out a lot of information about the enterprise in the statement of financial position. The information can be analysed to do what?
The information can be analysed to understand the enterprise’s performance
You can find out a lot of information about the enterprise in the statement of financial position. The information can be analysed to understand the enterprise’s performance.
From this, what can you do?
From this, you can make suggestions to advise the enterprise on the actions it may need to take
What is the information in the statement of financial position?
The information in the statement of financial position is:
1) Fixed assets
2) Current assets
3) Total assets owned by the enterprise (fixed assets + current assets)
4) Long-term liabilities
5) Current liabilities
6) Total liabilities owed by the enterprise (current liabilities + long-term liabilities)
7) Capital
8) Net current assets
The information in the statement of financial position is:
1) Fixed assets
2) Current assets
3) Total assets owned by the enterprise (fixed assets + current assets)
4) Long-term liabilities
5) Current liabilities
6) Total liabilities owed by the enterprise (current liabilities + long-term liabilities)
7) Capital
8) Net current assets
1) Fixed assets - what are fixed assets?
1) Fixed assets - assets not easily converted into cash
The information in the statement of financial position is:
1) Fixed assets
2) Current assets
3) Total assets owned by the enterprise (fixed assets + current assets)
4) Long-term liabilities
5) Current liabilities
6) Total liabilities owed by the enterprise (current liabilities + long-term liabilities)
7) Capital
8) Net current assets
2) Current assets - what are current assets?
2) Current assets - assets easily converted into cash
The information in the statement of financial position is:
1) Fixed assets
2) Current assets
3) Total assets owned by the enterprise (fixed assets + current assets)
4) Long-term liabilities
5) Current liabilities
6) Total liabilities owed by the enterprise (current liabilities + long-term liabilities)
7) Capital
8) Net current assets
4) Long-term liabilities - what are long-term liabilities?
4) Long-term liabilities - debts that have to be paid over more than one year
The information in the statement of financial position is:
1) Fixed assets
2) Current assets
3) Total assets owned by the enterprise (fixed assets + current assets)
4) Long-term liabilities
5) Current liabilities
6) Total liabilities owed by the enterprise (current liabilities + long-term liabilities)
7) Capital
8) Net current assets
5) Current liabilities - what are current liabilities?
5) Current liabilities - debts that need to be repaid within one year
The information in the statement of financial position is:
1) Fixed assets
2) Current assets
3) Total assets owned by the enterprise (fixed assets + current assets)
4) Long-term liabilities
5) Current liabilities
6) Total liabilities owed by the enterprise (current liabilities + long-term liabilities)
7) Capital
8) Net current assets
7) Capital - what is capital?
7) Capital - shareholders’ funds and retained profits
The information in the statement of financial position is:
1) Fixed assets
2) Current assets
3) Total assets owned by the enterprise (fixed assets + current assets)
4) Long-term liabilities
5) Current liabilities
6) Total liabilities owed by the enterprise (current liabilities + long-term liabilities)
7) Capital
8) Net current assets
8) Net current assets - what are net current assets?
8) Net current assets are current assets - current liabilities
Can the enterprise pay its short-term liabilities?
1) What to look for: What do you do?
1) What to look for: Calculate the net current assets (current assets - current liabilities)
Can the enterprise pay its short-term liabilities?
1) What to look for: Calculate the net current assets (current assets - current liabilities)
2) What it means: If the net current assets figure is negative (-), what?
2) What it means: If the net current assets figure is negative (-), the business may not have enough cash to pay its short-term debts
Can the enterprise pay its short-term liabilities?
1) What to look for: Calculate the net current assets (current assets - current liabilities)
2) What it means: If the net current assets figure is negative (-), the business may not have enough cash to pay its short-term debts
3) Possible actions to take: ?
Possible actions to take are to:
1) Increase sales
2) Reduce credit terms to customers
3) Sell off fixed assets
4) Reduce expenses
Can the enterprise take a long-term loan to help grow the business?
1) What to look for: ?
1) What to look for: The figure for long-term liabilities
Can the enterprise take a long-term loan to help grow the business?
1) What to look for: The figure for long-term liabilities
2) What it means: If long-term liabilities are large, …
2) What it means: If long-term liabilities are large, the business may find it difficult to get additional business finance
Can the enterprise take a long-term loan to help grow the business?
1) What to look for: The figure for long-term liabilities
2) What it means: If long-term liabilities are large, the business may find it difficult to get additional business finance
3) Possible actions to take: ?
Possible actions to take are to:
1) Sell off fixed assets
Or
2) Use cash to pay off some long-term loans
