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Income Statement/ Statement of Financial Position (Users of financial…
Income Statement/ Statement of Financial Position
Fixed assets are items owned by the business and intended for long term Eg.premises
Users of financial position:
Employees and managers
Shareholders
Lenders
Suppliers
Creditors fallen due within one year are short term debts owed by the business Eg. bank overdraft
Equity is the difference between what your business is worth and what you owe it
Working capital provides a good indication of a businesses short term liquidity
Liquidity refers to cash flow and shows whether the business can generate enough income to pay its short term debts
Working capital= current assets- creditors fallen due within one year
Total net assets(net worth) shows what the business would be worth if it were to sell its assets and pay its short term debts
Total net assets= fixed assets+ working capital
Capital employed sets out the capital structure of a business. It contains
Long term loans taken out by the business. These are creditors fallen due after more than one yaer.
Capital is money invested into a business and used to generate income. It comes from equity capital and debt capital.
Authorised share capital is the maximum limit of share capital
Issued share capital indicates the number of shares it has actually sold to date
Current assets are cash or any other item that can be converted into cash in the short term(within one year) Eg. bank deposits
Gearing measures the level of a businesses debts compared to its equity capital such as shares and reserves
The Corporation Tax in Ireland is 12.5%