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SingaporeBusiness StudiesQuick questions
Financial Information and Decisions
Quick questions on Statement of financial position and ratios explained: O-Level Business Studies
5short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What is purpose of the statement of financial position?Show answer
A statement of financial position shows what a business owns (assets), what it owes (liabilities) and the owners' stake (equity) on a particular date. It is a snapshot of the firm's financial health, used by owners, lenders and investors to judge stability.
What are using ratios?Show answer
Ratios are most useful compared - over time (this year versus last) or against competitors - to spot trends and problems. They turn the income statement and statement of financial position into clear, comparable measures for decisions.
What is q1?Show answer
State the formula for the current ratio. [2 marks]
What is q2?Show answer
A firm has a net profit of 200,000. Calculate its net profit margin. [2 marks]
What is q3?Show answer
Explain why a business with good profits might still have poor liquidity. [4 marks]
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