BTEC BUSINESS -STATEMENT OF FINANCIAL POSITION EXAM AND VERIFIED SOLUTIONS 2024

What is a balance sheet? - Answer a snapshot of the firm's assets and liabilities at a given point in time, this is not always accurate but is an overview of how the business is performing. This is a legal requirement to have a business execute these documents and for the business to understand how its performing. Assets - Answer what the business owns, such as land or buildings. Fixed Assets? - Answer Long-term assets that are relatively permanent such as land, buildings, or equipment. These are assets that are not known to change over time. Current Assets? - Answer Assets that companies expect to convert to cash or use up within one year. Assets that change over time or depreciate in value. What is working capital? - Answer Working capital is the amount of liquid assets a company has on hand. This helps plan for future needs and operate on a day to day basis. Working Capital Formula - Answer current assets - current liabilities Equity? - Answer the value of the shares issued by a company. Net assets formula - Answer (Total Fixed Assets + Total current assets) - (total current liabilities + total long term liabilities) Net current assets - Answer current assets - current liabilities net profit - Answer Capital Employed - Opening capital + Drawings (taken out of the business finance