Which of the following would you use to work out a company's gearing ratio? Select TWO.
0current liabilities
Gearing measures how much of an organisation's long-term funding is made up of long term debt and loans. Therefore the correct answers are 'shareholder equity' and 'long term debt'.
There are many question about financial ratios that can come up on the exam. If you're unsure on them I suggest doing further reading outside of the study guide as this will help. I like this youtube video (I'm not associated with the makers of this video but think they're really good at explaining things to beginners) Gearing Ratio explained (youtube.com)
The gross profit of a company can be calculated by using a simple formul
a. What is this?
gross profit = total revenue - cost of sales.
Learn all you can about financial ratios and financial statements for the exam- it's a very common topic
Polygon Incorporated is a new company in the mining industry, which often gets bad press due to issues of sustainability. Which of the following should Polygon Incorporated consider when developing sustainable business practices?
The three pillars of sustainability are profit, people and planet. This may also be referred to as social, economic and environmental.
Ivan is an investor who is looking to invest in new businesses. He is reviewing several companies and working out what his equity would be. Which of the following does Ivan need to know to calculate shareholder equity? Select TWO.
Shareholder Equity = Total Assets - Total Liabilities
Steff is a procurement manager at Giant Buttons Ltd who are considering offshoring a small section of their manufacturing operations. Which of the following is a risk of offshoring that Steff should consider.
The correct answer is importation rules and tariffs. This is because in offshoring some of the manufacturing will be done in another country then shipped back to the UK. The products will have to go through customs so may be subject to tariffs and duties.
Steff's not exporting anything in the scenario and paying electronically and getting lower costs are not RISKS.
