Business Studies - Section Eight - The balance sheet - Capital employed

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What are the two types of shareholder funds shown on the balance sheet?
Share capital AND Retained profit and reserves
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What is included under the heading 'long-term liabilities' on a balance sheet?
Money owed to others (i.e. Bank loan and debentures)
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What is the term for describing all the money that has been put into the business?
Capital employed
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Explain why the balance sheet is useful to a firm's stakeholders
Stakeholders use the balance sheet to assess the financial health of a business. Also, the net assets figure from the balance sheet can show this. A business whose net assets are growing each year is probably healthy.
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What is share capital?
It is the money put into the business when shares were originally issued. This might have been years and years ago for long-established companies. This is not the same as what the shares are currently worth.
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Other cards in this set

Card 2

Front

What is included under the heading 'long-term liabilities' on a balance sheet?

Back

Money owed to others (i.e. Bank loan and debentures)

Card 3

Front

What is the term for describing all the money that has been put into the business?

Back

Preview of the front of card 3

Card 4

Front

Explain why the balance sheet is useful to a firm's stakeholders

Back

Preview of the front of card 4

Card 5

Front

What is share capital?

Back

Preview of the front of card 5

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