Business 0450 · IGCSE · Statement of financial position
Statement of financial position — practice question
HRO makes children’s toys and operates as a private limited company. Its shareholders mainly aim to raise profit. That may clash with the aims of other stakeholder groups, such as its 30 suppliers. HRO’s Managing Director understands that market research can support marketing decisions. The Finance Director is drawing up HRO’s statement of financial position. Table 3.1 gives an extract.
(a)[2]
Define ‘non-current assets’ in your own words.
(b)[2]
Calculate HRO’s current ratio and show how you worked it out.
(c)[4]
State whether each of the following should be classified as a current asset or a current liability:
Trade receivables.
Trade payables.
Overdraft.
Inventory.
(d)[6]
Explain one way that the objective of HRO’s shareholders to increase profit could conflict with the objectives of each of the following stakeholder groups:
Customers.
Suppliers.
(e)[6]
Do you think the advantages of using primary market research for a business are greater than the disadvantages? Justify your answer.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Resources or items that are owned by the business and used for more than one year” …