Statement of Financial Position (Cambridge (CIE) IGCSE Business): Exam Questions

Do you think having a high level of non-current liabilities is always a problem for a growing business? Justify your answer.

Do you think having more current liabilities than current assets is always a problem for a growing business? Justify your answer.

Explain two ways Green Valley Garden Centre could use its statement of financial position to make business decisions.

Do you think maintaining adequate working capital is always essential for a business's long-term success? Justify your answer.

Explain four reasons why current assets are important to a business.

Consider how each of the following three factors from Tasty Tapas' Statement of Financial Position could affect the decision to expand into Country Y.

• Non-current assets of $800,000

• Current ratio of 1.33

• Long-term loan of $500,000

Which factor is likely to have the greatest impact on the expansion decision? Justify your answer.

Refer to the following insert (opens in a new tab)when answering the question

Consider the advantages and disadvantages of three sources of finance mentioned in the appendix that Tokumbo could use for his safari business expansion:

• Leasing

• Bank loan

• Retained profit

Which source of finance would have the most significant impact on the statement of financial position? Justify your answer.

Refer to the following insert (opens in a new tab) (opens in a new tab)when answering the question.