12 marks
Define ‘current liabilities’.
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Statement of Financial Position (Cambridge (CIE) IGCSE Business)
Exam Questions
58 mins12 questions22 marks
Define ‘shareholders’ equity’.
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32 marks
Define ‘statement of financial position’.
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42 marks
Define ‘current assets’.
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54 marks
State whether each of the following is classified as a current asset or a current liability:
Overdraft
Trade receivables
Trade payables
Cash in bank
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6
2 marks
2 marksCase Study
AHG is an established business as it has been operating for a long time. It sells garden products including plants and flowers. AHG uses competitive pricing. The business has 4 managers and 30 other employees. All AHG’s managers use delegation. The Finance Manager is analysing AHG’s statement of financial position as she is interested in its liquidity. An extract is shown in Table 1.1.
Table 1.1: Extract from AHG’s statement of financial position at 30 March 2022 ($000)
Non-current assets | 800 |
Current assets | 660 |
Inventories | 360 |
Current liabilities | 600 |
Calculate AHG's acid test ratio.
Show your working.
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72 marks
Identify two examples of non-current assets.
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16 marks
Do you think having a high level of non-current liabilities is always a problem for a growing business? Justify your answer.
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26 marks
6 marksCase Study
VCG manufactures high-quality briefcases and travel bags. VCG has 50 skilled production workers in its factory. VCG is planning to expand by building a second factory. Different locations are being considered. The Managing Director is reviewing VCG’s financial statements. An extract from its statement of financial position is shown in Table 3.1. Both internal and external stakeholder groups of VCG are interested in this information.
Table 3.1: Extract from VCG’s 2021 statement of financial position ($)
Current assets | 300,000 |
Current liabilities | 250,000 |
Non-current assets | 1,500,000 |
Shareholders' equity | 800,000 |
Explain two ways VCG's internal stakeholders might use the information from its statement of financial position.
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36 marks
6 marksCase Study
AHG is an established business, as it has been operating for a long time. It sells garden products, including plants and flowers. AHG uses competitive pricing. The business has 4 managers and 30 other employees. All AHG’s managers use delegation. The finance manager is analysing AHG’s statement of financial position as she is interested in its liquidity. An extract is shown in Table 1.1.
Table 1.1: Extract from AHG’s statement of financial position at 30 March 2022 ($000)
Non-current assets | 800 |
Current assets | 660 |
Current liabilities | 600 |
Explain two ways AHG's external stakeholders may use its statement of financial position.
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112 marks
Using Appendix 2 and other information, consider TT’s financial position. Do you think TT is in a good financial position to expand? Justify your answer using suitable calculations.
Refer to the following insert when answering the question
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212 marks
12 marksConsider how each of the following three factors from Tasty Tapas' Statement of Financial Position could affect the decision to expand into Country Y.
Non-current assets of $800,000
Current ratio of 1.33
Long-term loan of $500,000
Which factor is likely to have the greatest impact on the expansion decision? Justify your answer.
Refer to the following insert when answering the question
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