Using financial data
- Created by: zelizabeth
- Created on: 16-03-14 12:17
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- Using financial data to measure and assess performance
- Income statement
- a financial document that summarises a business's trading activity and expenses to show whether it has made a profit or a loss
- gross profit; revenue minus cost of sales
- operating profit; the revenue earned from every day trading activities minus the costs involved in carrying out those activities
- profit for the year; the profit earned after all the other items, such as exceptional items and finance income or finance costs have been included
- earnings per share; how much a shareholder would earn if all of the profit were given to shareholders as dividends
- profit quality; the sustainability of profit
- profit utilisation; how profit is being used e.g. whether it is being ploughed back into the business or distributed to shareholders
- Balance sheet
- a financial document that summaries the net worth of a business, it balances total assets with total equity and liabilities
- Inventories; premises and stock
- Non-current assets; (fixed assets) items of value owned by the business from share capital and retained profit
- Current assets; resources owned by the business whose value varies as a result of daily business activities. e.g. cash, inventories
- Intangible assets; purchased items without physical form such as goodwill or brand names
- Current liabilities; financial obligations of the business payable within 12 months
- Non current liabilities (long term liabilities); debts that the business has more than one year to repay
- Net current liabilities; current liabilities plus current assets
- Net assets; total assets minus total liabilities
- Working capital; a measure of a firms ability to meet day-to-day expenses
- Depreciation; an accounting practice which allows the value of fixed asset to be spread over its useful life
- Trade receivables; amounts owed by debtors to the business
- Debtor; someone who owes the business money, e.g. customer who has not paid yet
- Trade payables; amounts owed by the business to creditors
- Creditor; someone the business owes money to e.g. supplier who has not yet been paid
- Income statement
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