Financial statements (AQA GCSE Business): Flashcards
📚Flashcards
Practise the cards
15 cards from this deck
ShowHide
Practise the cards
15 cards from this deck
Financial statements
Financial statements
Essential documents every business must produce by law
Statement of financial position
Statement of financial position
Snapshot of business finances at one specific moment in time
Income statement
Income statement
Performance record showing profit/loss over a period (1 year)
Why investors use financial statements
Why investors use financial statements
To assess risks, dividends & management performance
Why lenders use financial statements
Why lenders use financial statements
To check if loans will be repaid on time with interest
Why employees use financial statements
Why employees use financial statements
To assess job security & ability to pay wages
Current assets
Current assets
Items convertible to cash within next 12 months
Least liquid current asset
Least liquid current asset
Inventories
Most liquid current asset
Most liquid current asset
Cash
ICE mnemonic for liquidity
ICE mnemonic for liquidity
Inventories, reCeivables, cash (Easily available)
Current liabilities
Current liabilities
Debts that must be paid within next 12 months
Net current assets formula
Net current assets formula
Current Assets - Current Liabilities
Net assets formula
Net assets formula
Non-curr Assets + Net Curr Assets - Non-curr Liabilities
Negative net current assets
Negative net current assets
Warning sign - may struggle to pay immediate debts
Receivables
Receivables
Amounts owed to business by customers who bought on credit