Using financial data

HideShow resource information
View mindmap
  • 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


No comments have yet been made

Similar Business Studies resources:

See all Business Studies resources »See all Financial Planning resources »