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Category: Finance

5.1 Business Finance: Needs and Sources

5.1.1 The Need for Finance The first part of the unit is an introduction to the fundamentals of finance.  Shorter knowledge questions are more likely, however, make sure you have a clear understanding of the three different reasons businesses need finance, as this forms the building blocks of later more difficult questions. “Come on in!”

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5.2 Cash-Flow Forecasting and Working Capital

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

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5.3 Income Statements

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

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5.4 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 Position is constructed. Furthermore, questions on this topic are much less popular than questions on profit or cash flow. What you do need

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5.5 Analysis of Accounts

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

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Past Paper Business Exam Guide