liquidity Flashcards
1
Q
what is a statement of financial position?
A
something that measures the amount of assets and liabilities a business has.
2
Q
whats the difference between non-current and current assets?
A
non-current assets are long term resources that will be used repeatedly while current assets are assets that will be turned into cash by the end of the year.
3
Q
whats the difference between non- current and current liabilities?
A
non-current relates to long term loan or other money owed by the business, while current liabilities need to be repaid within a year.
4
Q
how to calculate net assets?
A
total liabilities- total assets
5
Q
what is the current ratio calculation?
A
current assets/current liabilities
6
Q
what is acid test calculation?
A
current assets- inventory/ current liabilities
