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!”

Read More »

5.2 Cash-Flow Forecasting and Working Capital

Table Of Contents5.2.1 The Importance of Cash and of Cash Flow ForecastingWhy cash important to a businessWhat is a cash-flow forecast?Amend or complete a simple cash-flow forecastHow to interpret a simple cash-flow forecastHow a short-term cash-flow problem might be overcome5.2.2 The Concept and Importance of Working Capital Nearly everyone will be aware of the importance

Read More »

5.3 Income Statements

Table Of Contents5.3.1 What is Profit? Why is Profit Important?Importance of profit to private sector businessesDifference between profit and cash5.3.2 Income StatementsMain 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 of different business decisions are

Read More »

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

Read More »

5.5 Analysis of Accounts

Table Of Contents5.5.1 Concept of Importance of ProfitabilityThe concept and importance of profitability Return on Capital Employed (ROCE)5.5.3 Liquidity RatiosThe Concept and Importance of LiquidityCurrent RatioAcid Test Ratio5.5.4 Why and how accounts are usedNeeds of different users of accounts and ratio analysisHow users of accounts and ratio results might use information to help make decisions 5.5.1

Read More »
Scroll to Top