HBM - Finance PC Revision

employee

HMRC

trade union

lender

trade payable

government

HMRC

trade union

lender

trade payable

shareholder

HMRC

trade union

lender

trade payable

shows profit/loss made

shows all the items a business owes and owns

shows the cash inflows and outflows

can be used for decision making

sales revenue

cost of sales

gross profit

expenses

profit for the year

sales revenue

cost of sales

gross profit

expenses

profit for the year

sales revenue

cost of sales

gross profit

expenses

profit for the year

sales revenue

cost of sales

gross profit

expenses

profit for the year

sales revenue

cost of sales

gross profit

expenses

profit for the year

Assets are owned by the company whereas liabilities are items owed.

Assets are owned by the company. Liabilities are items owed.

Assets are items owed by the company whereas liabilities are items owned.

Assets are items owed by the company. Liabilities are items owned.

Net assets show the overall value of the business whereas E&R shows how the business has been financed.

Net assets shows how the business has been financed whereas E&R shows the overall value of the business.

Net assets show the overall value of the business. E&R shows how the business has been financed.

Net assets shows the assets whereas E&R shows the equity and reserves.

both GP% and PFY% can be improved by increasing the sales figure

GP% shows the ability to pay back short-term debts whereas PFY% shows the ability to pay back in a crisis situation.

GP% measures % profit made from buying and selling whereas PFY% shows % profit once expenses are deducted.

Increase prices

Cheaper supplier

Reduce expenses

Reduce current liabilities

Both CR and ATR show the ability of the firm to pay back debts as it shows liquidity.

CR shows the ability to pay back short-term debts whereas ATR shows the ability to pay back in a crisis situation.

CR shows current assets whereas ATR does not.

use JIT

increase current assets

reduce expenses

increase profit for the year

Use JIT

Sell excess stock

Negotiate sale or return with supplier

Increase sales

Decrease current liabilities