Finance



Item Name

Why is profit maximization considered incomplete as the definition of what most businesses seek to achieve?

Why, in practice, would borrowing by the business to raise cash to pay a dividend not be economically equivalent to borrowing by the individual shareholders to provide themselves with cash?

Counterpoint plc, a wholesaler, has the following accounting ratios for last year and this year: / On the basis of these ratios, comment on the performance of the business this year as compared with last year.

People often refer to a business as having a ‘strong balance sheet’. What do they mean by this?

The acid test ratio is not included in Taffler’s Z-score model for identifying potentially failing businesses. Why is this?

The first entry in the standard-layout cash flow statement is ‘cash flows from operating activities’. How is this figure different from the operating profit for the same period?

The following are the financial statements of High Street Enterprises plc for last year and this year: / / Calculate the suitable financial ratios for High Street Enterprises plc for last year and this year (use year-end figures where balance sheet items are involved) and use the ratios to comment on the performance and position of the business.

Talco Ltd undertakes research work. It also manufactures engineering products. It is currently engaged on a research project which, when completed, will be sold for £250,000. So far, costs totalling £200,000 have been incurred by Talco on the project. This is more than was budgeted to bring the project to the present stage and, as a result, the question arises as to whether it would be better...

The following are the financial statements of Persona Ltd for last year and this year: / Calculate the following ratios for both years: Return on capital employed Return on ordinary shareholders’ funds Gross profit margin l Operating profit margin Current ratio Acid test ratio Inventories turnover period

The following are the financial statements of Prospect plc for last year and this year: / Note that Prospect plc hopes to retain the bank overdraft on a semi-permanent basis. Calculate the following financial ratios for Prospect plc for last year and this year. (Use year-end figures where balance sheet items are involved). Return on capital employed Return on ordinary shareholders’ funds Gross...