The provision of financial information to show external users the financial performance of the business – concentrates on historical data.
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Card 7
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The creation of financial information for the internal users in a business to predict, plan, review and control the financial performance of the business.
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Debts owed by an organisation to suppliers, shareholders, investors or customers who have paid in advance.
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Funds provided by shareholders to set up the business, fund expansion and purchase fixed assets.
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Revenue – Cost of Sales. Shows how efficiently a business is converting its raw materials or stock into finished products.
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The revenue earned from everyday trading activities minus the costs involved in carrying out the activities. It is also gross profit minus expenses.
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A method of assessing a firm’s financial situation by comparing two sets of linked data.
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Measure the efficiency with which a business makes a profit, in relation to its size.
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Measures the profitability of a business by calculating its operating profit as a % of the capital that a business has at its disposal – its capital employed.
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Measures the ability of a business to stay solvent (pay its liabilities) in the short term.