CAIE AS LEVEL BUSINESS (9609) Flashcards

This collection of flashcards covers key terms and concepts from the CAIE AS Level Business (9609) lecture notes.

Operating profit margin % = __.

operating profit/revenue x 100

Liquidity refers to the ability of a firm to pay its __.

short-term debts

Current ratio is calculated as __.

current assets/current liabilities

The Acid-test ratio is calculated as __.

liquid assets/current liabilities

Liquid assets are defined as __.

current assets - inventories (stocks)

Window-dressing is __.

presenting the company accounts in a favourable light

Cash flow is the sum of __ to a business less the sum of cash payments (outflows).

cash payments (inflows)

Liquidation occurs when a firm __.

ceases trading and its assets are sold for cash

A business is considered insolvent if it cannot meet its __.

short-term debts

Cash inflows are payments in cash received by a business, such as those from __.

customers (trade receivables)

Cash outflows are payments in cash made by a business, such as those to __.

suppliers and workers

A cash-flow forecast is an estimate of a firm's future cash __ and outflows.

inflows

Net monthly cash flow is the estimated difference between monthly cash __ and cash outflows.

inflows

The opening cash balance is the cash held by the business at the __ of the month.

start

The closing cash balance becomes next month's __ cash balance.

opening

Overtrading is expanding a business rapidly without obtaining all of the necessary __.

finance

Credit control is the monitoring of debts to ensure that __ are not exceeded.

credit periods

Bad debt refers to __ that is now very unlikely to ever be paid.

unpaid customers' bills

Creditors are suppliers who have agreed to supply products on __ and who have not yet been paid.

credit

To calculate the current ratio, divide current __ by current liabilities.

assets

Liquid assets can be defined as current assets minus __.

inventories (stocks)

The process of window-dressing can be used to __ the business performance.

flatter

Cash outflows include payments to __.

workers

Insolvency occurs when a business cannot meet its short-term __.

debts

Credit control helps to avoid __ of debts.

exceeding the credit period

The cash inflow from receiving a loan is an example of a cash __.

inflow