Table Of Contents 5.5.1 Concept of Importance of Profitability The concept and importance of profitability Return on Capital Employed (ROCE) 5.5.3 Liquidity Ratios The Concept and Importance of Liquidity Current Ratio Acid Test Ratio 5.5.4 Why and how accounts are used Needs of different users of accounts and ratio analysis How users of accounts and
Table Of Contents 5.4.1 Statement of Financial Position The main classifications of assets and liabilities 5.4.2 Interpret a Simple Statement of Financial Position The statement of financial position and the idea of balancing assets and liabilities is a difficult concept. However, for IGCSE you don’t need an detailed understanding of how the Statement of Financial
Table Of Contents 5.3.1 What is Profit? Why is Profit Important? Importance of profit to private sector businesses Difference between profit and cash 5.3.2 Income Statements Main features of an income statement Unsurprisingly as profit or “the bottom line” is the ultimate objective of nearly all business activity, questions on calculating profit or evaluating the profitability
Table Of Contents 5.2.1 The Importance of Cash and of Cash Flow Forecasting Why cash important to a business What is a cash-flow forecast? Amend or complete a simple cash-flow forecast How to interpret a simple cash-flow forecast How a short-term cash-flow problem might be overcome 5.2.2 The Concept and Importance of Working Capital Nearly
Table Of Contents 5.1.1 The Need for Finance The main reasons why businesses need finance Understanding the difference between short-term and long-term finance needs 5.1.2 Main Sources of Finance Internal sources and external sources Short-term and long-term sources with examples Alternative sources of capital The main factors considered in making the financial choice Recommend and
