Have an account?
Sufficient working capital is needed to prevent a business from becoming illiquid.
The _________ is a measure of liquidity which excludes _______.
Current ratio, trade receivable
acid test ratio, trade receivable
Current ratio, inventory
acid test ratio, inventory
These are the examples of long term finances, except ______
sale and leaseback of non-current assets is an example of external sources of finance
Issuing share capital is an appropriate way to raise finance for a sole trader
Which one of these ratios is used to measure profitability?
Gross profit margin
State the accounting equation
Example of non-current asset is _______
Cash at bank
The formula of BEP is _____
Fixed cost / contribution per unit
Fixed cost / variable cost
Fixed cost / selling price
Fixed cost / total contribution
These are the ways to improve current ratio, except _____
Obtain long term loan
Sell of fixed assets for cash
Sell off inventories for cash
Owner invests more money into the business
Cash is not equal to profit
What is the characteristic of variable cost?
cannot be identified with a unit of production
do not change when the level of output changes
vary as output changes
do not change when the level of output changes until it reach certain level
What is the formula for contribution?
cost price - selling price
fixed costs - variable costs
selling price - variable cost
selling price - cost price
the margin between selling price and variable costs