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Finance - Business Studies - Past HSC Questions Flashcards | StudBud
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Finance - Business Studies - Past HSC Questions
Finance - Business Studies - Past HSC Questions
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2012-2021
Flashcards
51 cards
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Questions
51
Answers
1
The gearing for this business in 2020 indicates that it is
better than the industry average and has improved since 2019
worse than the industry average and has improved since 2019
better than the industry average and has improved since 2019
worse than the industry average and has worsened since 2019
2
Why would a business choose debentures as a source of funding?
To reduce financial risk
To provide security over assets
To retain ownership and control
To obtain cheap, short term finance
3
Which of the following shows the gross profit and the net profit ratio for this business in 2020?
C
A
B
D
4
A business is planning to increase its market share by merging with a competitor. Identify the financial objective.
Liquidity
Growth
Profitability
Solvency
5
Which of the following statements is true about gearing for Kerry's Warehouse in 2014?
It is better than industry average and has worsened since 2013
It is worse than industry average and has improved since 2013
It is better than industry average and has improved since 2013
It is worse than industry average and has worsened since 2013
6
What would be the best strategy for a business to increase its gross profit?
Reduce fixed costs
Use cost centres
Use sale and lease back
Minimise expenses
7
What is a source of new capital for a public company?
Primary market of the ASX and Investment Commission
Secondary market of the ASX
Primary market of the ASX
Secondary market of the ASX and Investment Commission
8
A sole trader invests $500 000 into her business. What is this an example of?
Internal equity finance
Internal debt finance
An overdraft
Retained profits
9
Which of the following would improve the financial position of a business?
Higher current ratio and lower accounts receivable turnover ratio
Lower current ratio and lower accounts receivable turnover ratio
Higher current ratio and higher accounts receivable turnover ratio
Lower current ratio and higher accounts receivable turnover ratio
10
Which of the following is an example of legal compliance for a sports store?
Paying dividends to shareholders
Induction of new employees
Paying taxes on time
Offsetting carbon emissions
11
What is the gearing ratio (total liabilities ÷ total equity) for this business?
0.73 : 1
0.81 : 1
0.67 : 1
0.75 : 1
12
What is the net profit ratio (net profit ÷ sales) for 2014?
25%
20%
47%
10%
13
The efficiency of a business can best be determined by which of the following?
Value of current assets
Accounts receivable turnover ratio
Value of current liabilities
Gross profit ratio
14
A business requires new manufacturing equipment. Which of the following would provide leasing for this equipment?
Finance companies
Superannuation funds
Unit trust
Property trusts
15
An Australian farmer has been contracted to sell 1000 tonnes of oranges to an American juice manufacturer at a set price
US manufacturer using a derivative to protect themselves from a falling AUD
US manufacturer using a derivative to protect themselves from a falling USD
The Aus farmer using a derivative to protect themselves from a falling USD
The Aus farmer using a derivative to protect themselves from a falling AUD
16
Which of the following groups would suffer the worst financial impact as a result of an increase in value of the AUD?
Australian producers selling wine to New Zealand
Japanese shareholders of an Australian bank
Australian car makers purchasing inputs from Italy
American travel agents organising tours for Australians
17
Which of the following would be found on an income statement?
Accounts payable
Intangibles
Gross profit
Net assets
18
The expense ratio (total expenses ÷ sales) is always
the difference between the net profit ratio and the gross profit ratio
greater than the gross profit ratio
the difference between sales and the gross profit ratio
greater than the net profit ratio
19
A business is purchasing a new property. Which source of finance is most appropriate?
Debenture
Letter of credit
Shares
Mortgage
20
When a business uses factoring, they improve their
cash flow but reduce their profitability
working capital but increase their liabilities
cash flow by increasing their revenue
working capital by reducing their costs
21
What is the average number of days the business takes to collect its debts?
30 days
25 days
15 days
29 days
22
Which of the following must have occurred between Year 1 and Year 2?
Expenses increased
Expenses decreased
Cost of goods sold increased
Cost of goods sold decreased
23
Which of the following is the correct order for financial planning?
A
D
B
C
24
The liquidity position of this business in 2020 indicates that it is
better than the industry average and has worsened since 2019
worse than the industry average and has improved since 2019
better than the industry average and has improved since 2019
worse than the industry average and has worsened since 2019
25
A hairdresser includes proceeds of the sale of salon equipment in the business's income statement. Which limitation of
Timing issues
Normalised earnings
Valuing assets
Capitalising expenses
26
What is a characteristic of external equity finance?
Specific maturity date
Fixed returns to owners
Low interest payments
Diluted business ownership
27
Which of the following statements is true about liquidity for Kerry's Warehouse in 2014?
It is worse than the industry average and has improved since 2013
It is better than the industry average and has worsened since 2013
It is worse than the industry average and has worsened since 2013
It is better than the industry average and has improved since 2013
28
Why would a business factor its accounts receivable?
To increase the value of current assets
To improve cash flow
To improve the value of the business
To increase owner's equity
29
Kevin is considering investing in a business. To help Kevin determine which business to invest it, he should consider...
market share is determined
business sales growth is measured
similar businesses are evaluated
cash flow is assessed
30
Mick is deciding whether to purchase A or B and has received the following. Which will help him make the best decision?
Comparative ratio analysis
The value of assets
Industry averages
Total sales
31
A business ensures all its debts are paid as they fall due. Which financial objective is the business satisfying?
Efficiency
Growth
Liquidity
Solvency
32
The current ratio (current assets ÷ current liabilities) for this business is
unable to be calculated
acceptable
too high
dangerously low
33
Which organisation ensures that Barb's Batteries Pty Ltd operates in a financially responsible manner?
Reserve Bank of Australia
Australian Securities and Investments Commission
Australian Prudential Regulation Authority
Australian Securities Exchange
34
The table shows cash flow information for a business. What is the opening cash balance for April?
-$24 000
-$12 000
-$18 000
-$16 000
35
The role of a cost centre within a business is to monitor and control
receipts
assets
liabilities
expenses
36
What is the gross profit ratio for the business?
90%
78%
67%
53%
37
The table shows financial data for two businesses. Which of the following statements is correct?
Business B is more profitable and more efficient than Business A
Business A is more profitable but less efficient than Business B
Business B is more profitable but less efficient than Business A
Business A is more profitable and more efficient than Business B
38
Which of the following describes the change in both the gross profit ratio and expense profit ratio from 2019 to 2020?
B
A
C
D
39
Which of the following describes the change in gross profit ratio and expense ratio from 2014 to 2015?
C
A
B
D
40
The table shows information supplied by a business. Which shows the sales and net profit for this business?
Sales $200 000 ; Net Profit $100 000
Sales $66 700 ; Net Profit $50 000
Sales $600 000 ; Net Profit $300 000
Sales $600 000 ; Net Profit $200 000
41
Which of the following is an example of a unit trust?
An investor deposits money with a financial institution, receiving interest
Investors pool their money and it is invested in the property market
An investor purchases shares in a public company
Investors lend money directly to businesses and receive interest in return
42
Auditors have discovered that the value of legal fees paid has been included in the asset value of a new warehouse...
Timing issues
Capitalised expenses
Normalised earnings
Debt repayments
43
Company A intends to buy Company B. Company A might pay too much for Company B if B's financial manager decides to
normalise a large one-off asset sale
record their buildings at historcal cost although they increased in value
fully disclose the nature of the receivables owed to the company
capitalise their research and development expenses
44
What does the expense ratio measure?
Profitability
Efficiency
Solvency
Growth
45
In which of the following are both sources of funds appropriate for a business purchasing extra stock...
Debentures and factoring
Retained profits and unsecured notes
Retained profits and bank overdraft
Debentures and bank overdraft
46
Australian businesses export to Canada. What would happen if the value of the Australian dollar increased compared to...
There would be no effect on Canadian businesses
Canadian businesses would find Australian products more affordable
Australian products would become more expensive for Canadian businesses
Australian imports from Canada would become more expensive
47
Which of the following would immediately improve the working capital of a business?
Preparing a cash flow statement
Increasing credit sales
Using sale and lease back
Repaying debt to creditors more quickly
48
What effect would a global downturn in the economic outlook have on Australia's unemployment, output and exchange rates?
B
C
D
A
49
If Steve is a sole trader, how much equity does he have in the business?
$146 000
$35 500
$135 500
$12 800
50
Which of the following allows shareholders of a public company to acquire additional shares at a discount?
Private equity
Unsecured notes
Placements
New issues
51
Solvency is the ability of a business to
increase its market share
meet its long-term financial commitments
meet its short-term financial commitments
maximise its profits
