Finance - Cameron Paff

Ravenswood School For Girls - valid one year from Friday, 3 February 2023
FINANCE
Time-saving, fully
printable blackline
masters aligned to
the syllabus!
WORKSHEETS FOR NSW BUSINESS STUDIES
Cameron Paff
Ravenswood School For Girls - valid one year from Friday, 3 February 2023
Printable Worksheets
Finance
ISBN: 978-0-6484316-3-3
First Published January 2019. 5th Minor Update Edition: January 2023
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avenswood School For Girls - valid one year from Friday, 3 February 2023 Finance Worksheets – Cameron Paff
Key
From the syllabus
Multiple Choice
Vocabulary
Short Answer
Business Report
Printable Worksheets – Finance © Resource Factory 2023

A Glossary of Key Words .......................................................................................................................1
The Syllabus............................................................................................................................................2
Past HSC Questions Relevant to Finance ..............................................................................................4
Vocabulary List .......................................................................................................................................5
Role .......................................................................................................................................................11
Strategic role of financial management.............................................................................................11
Objectives of financial management .................................................................................................13
Interdependence with other key business functions .........................................................................15
Influences ..............................................................................................................................................17
Internal sources of finance – retained profits ....................................................................................17
External sources of finance ...............................................................................................................18
Financial institutions – banks, investment banks, finance companies, superannuation funds, life
insurance companies, unit trusts and the Australian Securities Exchange .......................................23
Influence of government – Australian Securities and Investments Commission, company taxation25
Global market influences – economic outlook, availability of funds, interest rates ..........................27
Processes ...............................................................................................................................................29
Planning and implementing – financial needs, budgets, record systems, financial risks, financial
controls..............................................................................................................................................29
Monitoring and controlling ..............................................................................................................36
Financial ratios ..................................................................................................................................44
Limitations of financial reports – normalised earnings, capitalising expenses, valuing assets, timing
issues, debt repayments, notes to the financial statements ...............................................................66
Ethical issues related to financial reports ..........................................................................................68
Strategies ...............................................................................................................................................70
Cash flow management.....................................................................................................................70
Working capital management ...........................................................................................................73
Profitability management..................................................................................................................80
Global financial management ...........................................................................................................83
Printable Worksheets – Finance © Resource Factory 2023

A Glossary of Key Words
Key words Meaning

Account for, state reasons for, report on. Give an account of narrate a series
Account
of events or transactions
Identify components and the relationship between them; draw out and relate
Analyse
implications
Assess Make a judgement of value, quality, outcomes, results or size
Calculate Ascertain/determine from given facts, figures or information
Compare Show how things are similar or different
Contrast Show how things are different or opposite
Critically
Add a degree of level of accuracy depth, knowledge and understanding logic,
(analyse/
questioning, reflection and quality to (analysis/evaluation)
evaluate)
Define State meaning and identify essential qualities
Describe Provide characteristics and features
Recognise or note/indicate as being distinct or different from; to note
Distinguish
differences between
Evaluate Make a judgement based on criteria; determine the value of
Examine Inquire into
Relate cause and effect make the relationship between things evident provide
Explain
why and/or how
Identify Recognise and name
Justify Support an argument or conclusion
Outline Sketch in general terms, indicate the main features of
Predict Suggest what may happen based on available information
Put forward (for example a point of view, idea, argument, suggestion for
Propose
consideration or action
Recall Present remembered ideas, facts or experiences
Recommend Provide reasons in favour
How See Explain/Analyse
Why See Explain/Analyse
What See Describe/Outline
Printable Worksheets – Finance -1- © Resource Factory 2023

The Syllabus
HSC Topic: Finance
The focus of this topic is the role of interpreting financial information in the planning and
management of a business.
Outcomes
The student:
H2 evaluates management strategies in response to changes in internal and external influences

H3 discusses the social and ethical responsibilities of management
H4 analyses business functions and processes in large and global businesses
H5 explains management strategies and their impact on businesses
H6 evaluates the effectiveness of management in the performance of businesses
H7 plans and conducts investigations into contemporary business issues
H8 organises and evaluates information for actual and hypothetical business situations
H9 communicates business information, issues and concepts in appropriate formats
H10 applies mathematical concepts appropriately in business situations
Content
Students learn to:
examine contemporary business issues to:
• explain potential conflicts between short-term and long-term financial objectives

• analyse the influence of government and the global market on financial management
• identify the limitations of financial reporting
• compare the risks involved in domestic and global financial transactions
investigate aspects of business using hypothetical situations and actual business case studies to:
• calculate key financial ratios

• assess business performance using comparative ratio analysis
• recommend strategies to improve financial performance
• examine ethical financial reporting practices
Students learn about:
Role of financial management
• strategic role of financial management

• objectives of financial management
– profitability, growth, efficiency, liquidity, solvency
– short-term and long-term
• interdependence with other key business functions

Influences on financial management

• internal sources of finance – retained profits
• external sources of finance
– debt – short-term borrowing (overdraft, commercial bills, factoring), long-term
borrowing (mortgage, debentures, unsecured notes, leasing)
– equity – ordinary shares (new issues, rights issues, placements, share purchase plans),
private equity
• financial institutions – banks, investment banks, finance companies, superannuation funds, life
insurance companies, unit trusts and the Australian Securities Exchange
• influence of government – Australian Securities and Investments Commission, company taxation
• global market influences – economic outlook, availability of funds, interest rates
Processes of financial management

• planning and implementing – financial needs, budgets, record systems, financial risks, financial
controls
– debt and equity financing – advantages and disadvantages of each
– matching the terms and source of finance to business purpose
• monitoring and controlling – cash flow statement, income statement, balance sheet
• financial ratios
– liquidity – current ratio (current assets ÷ current liabilities)
– gearing – debt to equity ratio (total liabilities ÷ total equity)
– profitability – gross profit ratio (gross profit ÷ sales); net profit ratio (net profit ÷ sales);
return on equity ratio (net profit ÷ total equity)
– efficiency – expense ratio (total expenses ÷ sales), accounts receivable turnover ratio
(sales ÷ accounts receivable)
– comparative ratio analysis – over different time periods, against standards, with similar
businesses
• limitations of financial reports – normalised earnings, capitalising expenses, valuing assets,
timing issues, debt repayments, notes to the financial statements
• ethical issues related to financial reports
Financial management strategies

• cash flow management
– cash flow statements
– distribution of payments, discounts for early payment, factoring
• working capital management
– control of current assets – cash, receivables, inventories
– control of current liabilities – payables, loans, overdrafts
– strategies – leasing, sale and lease back
• profitability management
– cost controls – fixed and variable, cost centres, expense minimisation
• revenue controls – marketing objectives
• global financial management
– exchange rates
– interest rates
– methods of international payment – payment in advance, letter of credit, clean payment,
bill of exchange
– hedging
– derivatives

Past HSC Questions Relevant to Finance
Multiple Choice Short Answer Section III & IV

Role 2014 Q2 2012 Q22d, Q23c 2012 Q27
2016 Q4 2015 Q25b 2017 Q25
2017 Q4 2016 Q21a
2018 Q24a
Influences 2014 Q14, Q19, Q20 2013 Q22b 2012 Q27
2015 Q6, Q10 2014 Q24c 2014 Q25
2016 Q14 2016 Q21b
2017 Q6, Q18 2018 Q24c
2018 Q7 2022 Q23d
2019 Q2, Q4, Q12, Q16
2022 Q13, Q14
Processes 2013 Q4, Q10, Q16 2012 Q22a-c 2016 Q26

2014 Q10 2015 Q24a, b 2019 Q25
2015 Q17, Q17 2019 Q22a, b, c
2021 Q25
2016 Q11, Q12, 19 2020 Q24a, b, d
2017 Q12, Q15, Q17, 2021 Q22a, b, c
Q20 2022 Q23a, b, c
2018 Q12, Q19, Q20
2019 Q14, Q15
2020 Q14,17,18,19,20
2021 Q13, Q20
2022 Q20
Strategies 2012 Q8, Q20 2013 Q24a, b 2013 Q26

2013 Q6 2014 Q24a i), ii), c 2015 Q28
2016 Q10 2017 Q24a, b 2016 Q26
2017 Q13 2018 Q24b 2017 Q25
2018 Q18 2020 Q24c 2018 Q26
2021 Q1, Q18, Q19 2021 Q22b 2020 Q26
2022 Q7, Q18 2022 Q25
Questions and suggested answers for these questions are available on the NESA website -
http://educationstandards.nsw.edu.au/wps/portal/nesa/11-12/Understanding-the-
curriculum/resources/hsc-exam-papers

Vocabulary List
Financial management
Profitability
Growth
Efficiency
Liquidity
Solvency
Short-term financial
objectives
Long-term financial
objectives
Finance
Internal sources of
finance
Retained profits
External sources of
finance
Debt finance
Short-term borrowing
Overdraft
Commercial bills

Factoring
Long-term borrowing
Mortgage
Debentures
Unsecured notes
Leasing
Equity finance
Ordinary shares
New issues
Rights issues
Placements
Share purchase plans
Private equity
Banks
Investment banks
Finance companies
Superannuation funds

Life insurance
companies
Unit trusts
Australian securities
exchange
Australian Securities
and Investments
Commission
Company taxation
Budgets
Record systems
Financial controls
Monitoring
Controlling
Cash flow statement
Income statement
Balance sheet
Current ratio
Gearing
Debt to equity ratio
Gross profit

Cost of Goods Sold

(COGS)
Gross profit ratio
Net profit ratio
Return on equity ratio
Expense ratio
Accounts receivable
turnover ratio
Comparative ratio
analysis
Normalised earnings
Capitalising expenses
Distribution of
payments
Discounts for early

payment
Current assets
Accounts receivables
Inventories
Current liabilities
Accounts payable
Sale and lease back

Fixed costs
Variable costs
Cost centres
Expense minimisation
Revenue control
Marketing objectives
Exchange rate
Payment in advance
Letter of credit
Clean payment
Bill of exchange
Hedging
Derivatives

Printable Worksheets – Finance - 10 - © Resource Factory 2023

Student Activities by Dot-point
Role
• strategic role of financial management

• objectives of financial management
• profitability, growth, efficiency, liquidity, solvency
• short-term and long-term
• interdependence with other key business functions
Strategic role of financial management

1. What is meant by financial management?
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2. Outline the strategic role of financial management.
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3. Discuss the importance of financial management to the success of a business.
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Objectives of financial management

1. Distinguish between liquidity and solvency.
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2. Outline how a business might achieve the goal of growth.
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3. Define the term efficiency in the vocabulary list.
4. Explain how the goal of efficiency might impact on the goal of profitability.
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5. Explain potential conflicts that may arise between short-term and long-term financial objectives.
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Interdependence with other key business functions
1. With reference to a case study/studies, analyse the interdependence between financial

management and the other key business functions.
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Influences
• internal sources of finance – retained profits

• external sources of finance
- debt – short-term borrowing (overdraft, commercial bills, factoring), long-term borrowing
(mortgage, debentures, unsecured notes, leasing)
- equity – ordinary shares (new issues, rights issues, placements, share purchase plans),
private equity
• financial institutions – banks, investment banks, finance companies, superannuation funds, life
insurance companies, unit trusts and the Australian Securities Exchange
• influence of government – Australian Securities and Investments Commission, company taxation
• global market influences – economic outlook, availability of funds, interest rates
Internal sources of finance – retained profits
1. What is meant by the term finance?
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2. Define the term retained profits in the vocabulary list.
3. Why would a business choose to use retained profits as a source of finance?
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4. Which of the following is an example of and internal source of finance?
A) Overdraft
B) Retained profits
C) Mortgage
D) Leasing

External sources of finance
Debt – short-term borrowing (overdraft, commercial bills, factoring), long-term

borrowing (mortgage, debentures, unsecured notes, leasing)
1. Define the following terms in your vocabulary list.
• External finance
• Debt finance
2. Distinguish, using examples, between short-term borrowing and long-term borrowing.
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3. Explain what the following forms of debt finance are and in which situations they would be
appropriate to be used -
i) Commercial bills
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ii) Factoring
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iii) Debentures
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iv) Unsecured notes
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4. A bank allows a business to overdraw their account up to an agreed limit and for a
specified time, to help overcome a temporary cash shortfall.
This is an example of
A) an overdraft
B) leasing.
C) a commercial bill.
D) a mortgage.
5. A business is looking to purchase land to build its new factory. Which type of debt finance would
best suit its needs?
A) An overdraft
B) Leasing
C) Commercial bills
D) Mortgage

Equity – ordinary shares (new issues, rights issues, placements, share purchase
plans), private equity
1. Define the term equity finance in your vocabulary list.
2. Describe the different types of issues of ordinary shares that are available to businesses.
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3. In which situations might a business use private equity as a source of finance?
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4. Mack has needs to purchase a number of computers and new software for his music
recording studio business to gain a competitive advantage. Mack wants to avoid experiencing
financial difficulties. Recommend to Mack the appropriate sources of finance for the
business "Le More Music" to overcome the problems.
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Financial institutions – banks, investment banks, finance companies,

superannuation funds, life insurance companies, unit trusts and the Australian
Securities Exchange
Short business report
1. Describe the various financial institutions that may influence a business and explain how a business
might be affected by them.
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Influence of government – Australian Securities and Investments Commission,

company taxation
1. Discuss the influence that ASIC can have on the financial management of a business.
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2. Analyse the effects of the government’s decision to reduce company tax on small businesses to
27.5%.
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3. With reference to a case study/studies, analyse the various effects that government may have on the
financial management of the business.
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Global market influences – economic outlook, availability of funds, interest rates

1. With reference to a case study/studies, analyse the various effects that global market
influences may have on the financial management of the business.
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Processes of financial management

• planning and implementing – financial needs, budgets, record systems, financial
risks, financial controls
• debt and equity financing – advantages and disadvantages of each
• matching the terms and source of finance to business purpose
• monitoring and controlling – cash flow statement, income statement, balance sheet
• financial ratios
• liquidity – current ratio (current assets ÷ current liabilities)
• gearing – debt to equity ratio (total liabilities ÷ total equity)
• profitability – gross profit ratio (gross profit ÷ sales); net profit ratio (net profit ÷ sales); return
on equity ratio (net profit ÷ total equity)
• efficiency – expense ratio (total expenses ÷ sales), accounts receivable turnover ratio (sales ÷
accounts receivable)
• comparative ratio analysis – over different time periods, against standards, with similar
businesses
• limitations of financial reports – normalised earnings, capitalising expenses, valuing assets,
timing issues, debt repayments, notes to the financial statements
• ethical issues related to financial reports

Processes
Planning and implementing – financial needs, budgets, record systems, financial

risks, financial controls
1. In which stage of the financial planning and implementing cycle would the following steps
take place?
Event Financial planning and Implementing step

Financial reports are analysed to see whether
financial goals are likely to be achieved or
changes need to be made e.g. profit goals
Insurance (e.g. against theft) and hedging (e.g.
against changing exchange rates) can be used
to give the business more financial security
Forecasting and management of cash flow to
identify times of cash surplus and cash deficit
Financial data is collected to assess the
business’ current financial situation or position
Control methods to check efficiency, accuracy
of information, and to compare actual and
planned performance e.g. variance reports
Decisions about financial objectives are made
as part of the overall business plan
Reports are prepared to summarise and
communicate financial information for internal
and external stakeholders e.g. Balance Sheet
Budgets are drawn up to estimate resource or
financial needs for specific business areas e.g.
capital expenditure and to predict business
performance (e.g. sales or expenditure).
An effective Management Information System
(MIS) to ensure accurate and reliable data is
prepared and maintained e.g. MYOB

2. Describe one stage of the financial planning cycle and how it affects the strategic role of the business.
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3. Recommend reasons for implementing financial controls.
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Debt and equity financing – advantages and disadvantages of each
Matching the terms and source of finance to business purpose
1. Discuss the costs and benefits of using debt and equity finance.
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2. Discuss the importance of matching the terms and source of finance to the business purpose.
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Dylan’s Surfboards
Dylan has owned a surfboard shop since the early 1980s. Dylan’s hard work, good service and low
prices have ensured that he has continued to stay in business. After a number of years in business he
borrowed $50 000 to expand the size of his store.
Having recently repaid the loan, Dylan has identified a number of possible areas for further expansion,
including:
- opening a number of new stores locally and interstate
- beginning to manufacture his own brand of surf accessories
- stocking ski equipment and skateboards to provide a consistent revenue stream across the year
Dylan believes that all of these options will ultimately be profitable, although there will be
considerable upfront costs. Currently the sole owner of Dylan s Surfboards, he loves the freedom of
running his own business. However, he is concerned that he has most of his savings invested in the
business.
3. As a financial consultant, advise Dylan on the following:

• Identify the main financial objective at Dylan’s surfboards.
• Explain how the pursuit of this objective will impact on other aspects of the business.
• Recommend THREE different sources of finance that Dylan could use.
• Assess the benefits and risks associated with the methods of financing you have chosen.
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4. Recommend a type/source of finance for these situations.
i) Panthers Earthmoving Pty Ltd intends to purchase a new D12 bulldozer at a cost of $800 000
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ii) Myer Sydney intends to significantly increase its stock holdings over the Christmas trading period
and requires additional funds of $10 million for 90 days.
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iii) Ten Tel is currently a partnership but has grown spectacularly in provision of communications and
internet services. It requires $100 million to remain competitive by upgrading its equipment and
networks.
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iv) Solano P/L is a major importer of goods from the Philippines. It is currently experiencing problems
because it has to pay upfront for imports while its customers have 60 days to pay their accounts. They
require $500 000 for 90 days.
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Monitoring and controlling
Cash flow statement

1. Define the following terms in the vocabulary list.
• Cash inflow
• Cash outflow
• Cash surplus
• Cash deficit
2. Outline the purpose of the cash flow statement.
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3. Bobby’s Boots Pty Ltd
January February
Opening Balance $0 Opening Balance 01 February ?
Cash Inflows $20 000 Cash Inflows $40 000
Cash Outflows $30 000 Cash Outflows $25 000
Closing Balance ? Closing Balance ?
Calculate the following -

Closing Cash Balance – January …………………………..
Opening Cash Balance – February …………………………..
Closing Cash Balance – February …………………………..
4. Bold Pty Ltd

Bold Pty Ltd – August Cash at Bank, 1 August $60 000
Cash Sales $20 000 Wages Paid $15 000
Cash Purchases $25 000 Receipts from Acc. Rec. $5 000
Payments to Creditors $30 000 Dividends Received $10 000
i) In what financial statement would you find this information? …………………………..
ii) Identify 2 cash inflows ………………………….. …………………………..
iii) Identify 2 cash outflows ………………………….. …………………………..
iv) Calculate the closing cash balance for August …………………………..

5. Extension Activity – Soapy Soaps
Construct a cash flow forecast for the business.
Soapy Soaps produce and sell high quality soaps to the high-income market in Appleville. They want to
know if they will have $20 000 in the bank at the end of September to replace the businesses work van,
and so are preparing a quarterly cash flow budget.
Sales Figures:
January - $12 000, February - $50 000, March - $40 000, April - $60 000, May –
$55 000, June - $65 000, July - $65 000, August - $70 000, September - $68 000.
Payments for materials supplied by Apple Tallow Works are on 14 days terms:
January - $12 000, February - $15 000, March - $20 000, April - $25 000, May –
$18 000, June - $19 000, July - $22 000, August - $24 000, September - $28 000.
Wages: $23 000 each month

Electricity: usually around $2 000 - paid every second month and the bill was last paid in May
Maintenance of equipment and vehicle: $2 500 per month
Interest expenses: $4 000 per month
Packaging costs: are usually 5% of sales and are paid in the month in which they are incurred
Bank Balance 1 July: $5 000
Remember
Opening Cash Balance = Closing Cash Balance of the previous month
Closing Cash Balance = Opening Cash Balance + Total Cash Inflows – Total Cash Outflows

Cash Flow Forecast – Soapy Soaps

July August September
Opening Cash Balance
Estimated Cash Inflows
∗
Total Cash Inflows
Estimated Cash Outflows
∗
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Total Cash Outflows
Closing Cash Balance
Can Soapy Soaps replace the work van? ……………………………………………………..

Income statement
1. True (T) or False (F)
T F
Income statements are also called Profit and Loss Statements
Sales, interest received and purchases are examples of revenues
In order to calculate gross profit, you must first calculate net profit
Wages, advertising and interest payments are examples of expenses
Stock and inventory have the same meaning
Cost of goods sold is calculated as opening stock plus drawings less closing
stock
If costs for a business are greater than revenues received, then a loss will
result
Gross profit is calculated as sales plus COGS
Purchases refers to stock that is bought during the accounting period
Income statements are also called revenue statements
Revenue statements identify the level of business debt compared to assets
and owner’s equity
Net profit is the difference between gross profit and other business expenses
The 3 main types of expenses are selling, financial and administrative
2. Outline the purpose of the income statement.
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3. Use the Revenue Statements for Year 1 and Year 2 to answer the following questions.
Joes Pty Ltd Year 1 Year 2

Sales 305 000 362 000
Less COGS 155 500 222 500
GROSS PROFIT
Less Operating Expenses
Financial Expenses
• Interest 1 050 1 150
Selling Expenses
• Advertising 18 450 19 550
• Wages 36 000 45 200
Administrative Expenses
• Wages 34 500 37 000
• Electricity 1 100 1 200
• Insurance 4 800 5 300
• Lease 2 000 3 000
• Stationery 600 600
Total Expenses 98 500 113 000
NET PROFIT (before tax)
Calculate the following for both years (show all working).
i) Gross Profit
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ii) Net Profit
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iii) Comment on the changes in profitability and give reasons for the changes.
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Balance sheet
1. Complete the equations on the table below.
OE = …… – L A = L + …… …… = A – OE
2. True (T) or False (F)
T F
The net value or worth of a business is shown by what the business owns
less what the business owes
External debts are covered by the (net) value of business assets less internal
claims by owners
Owner’s equity is the owners claim on the assets of the business after debts
have been paid
Assets are paid for using debt and equity finance

A balance sheet sets out the revenues and expenses of a business
A business usually owes debtors money
Capital, drawings and retained profits are elements of owner’s equity
A non-current liability is a debt that must be repaid within 12 months
The accounting equation always holds true – it must always balance
A bank overdraft is a current asset
Owner’s equity is the net worth of the business and is the difference
between total assets and total liabilities
Creditors are also referred to as accounts receivable
Cash and stock are current assets
Retained profit is profit that has been put aside for future use
A current asset is usually turned into cash within a year
Drawings is cash and goods taken by the owner for personal use
Liabilities are owned by the business
The accounting equation can be shown as OE = A + L
A mortgage is a non-current liability

3. Outline the purpose of the Balance Sheet for a business.
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4. Use the financial information for Lucy’s Designs for the period ending 30 June 20XX to answer the
following questions.
Accounts Receivable $6 000 Owner’s capital $40 000 Cash at Bank $6 000
Building $90 000 Inventory $20 000 Machinery $20 000
Mortgage $70 000 Drawings $500 Accounts Payable $10 000
Note: Net Profit = $22 500
How much do customers owe the business?

How much does the business owe its suppliers?
What is the value of current assets?
What is the value of non-current assets?
What is the value of current liabilities?
What is the value of non-current liabilities?
Calculate the net worth of the business.
Write the accounting equation for this business (showing

amounts)

5. Danielle’s Boutique Balance Sheet as at 30 June 20XX.
Assets Liabilities & Owners Equity

Current Assets Current Liabilities
Cash 20 000 Accounts Payable 25 000
Accounts Receivable 10 000 Non-Current Liabilities
Inventories 20 000 Loan 20 000
Non-Current Assets Owners Equity
Equipment 5 000 Capital 50 000
Building 45 000 Plus Profit 10 000
100 000 Less Drawings (5 000)
100 000
How much do customers owe the business?

How much does the business owe its suppliers?
What is the value of current assets?
What is the value of non-current assets?
What is the value of current liabilities?
What is the value of non-current liabilities?
Calculate the net worth of the business.
Write the accounting equation for this business (showing

amounts)

Financial ratios
Liquidity – current ratio (current assets ÷ current liabilities)
1. Complete the summary for the current ratio.

Measures the ability of the business to……………………………………………………………………………
Compares …………………………… with …………………………… ……………………………
Indicates l…………………………… for the business or its s……………………………
t…………………………… f…………………………… s…………………………….
The formula is……………………………
Usual standard or acceptable ratio is ………… , but may vary according to type of business, industry
averages and business objectives and other factors.
2. Outline the purpose of the current ratio.
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3. Define the term liquidity.
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Current Ratio exercises

4. Workin’ Caps Pty Ltd
• Cash at Bank $2 000 • Accounts Receivable $250

• Hats and other stock $5 000 • Van $8 000
• Mortgage $15 000 • Accounts Payable $300
• Credit Card Debt $2 500
i) Identify current assets and current liabilities for this business.
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ii) Calculate the current ratio (show all working).
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iii) Comment on liquidity for Workin’ Caps Pty Ltd.
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5. Fair Trading Pty Ltd

Stock $20 000, Overdraft $4 000, Cash $15 000, Equipment $25 000, Accounts Receivable $9 000,
Accounts Payable $16 000
i) Calculate the current ratio (show all working).

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ii) If the business sold $10 000 worth of stock on credit, what would be the effect on the current ratio
and liquidity?
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6. Barry’s Beachballs has the following financial information.

Cash $1 500,
Accounts Receivable $210 000,
Stock $50 200,
Short Term Loan $12 000,
Accounts Payable $74 600
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ii) Would you supply goods on credit to Barry? Justify your answer.
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Gearing – debt to equity ratio (total liabilities ÷ total equity)

1. Complete the summary for the Debt to Equity Ratio
Measures the ability of the business to …………………………………………………………………..

Compares …………………………… with ……………………………
Indicates s…………………………… or g…………………………… for the business or its
l…………………………… t…………………………… f……………………………
s……………………………
The formula is……………………………
Usual standard or acceptable ratio is ………, but may vary according to type of business, industry
averages and business objectives and other factors.
2. Define the term gearing in the vocabulary list.
3. Outline the purpose of the debt to equity ratio.
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Debt to Equity Ratio exercises
4. A business has a solvency ratio of 320%. What does this mean? (use the terms gearing and/or
solvency in your answer).
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5. Company A has a Debt to Equity Ratio of 4:1, Company B has a Debt to Equity Ratio of .25:1. In
which company would you prefer to be a shareholder? Justify your answer.
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6. Examine the financial information for Perfection Printing Pty Ltd below.
Cash $40 000 Overdraft $10 000
Stock $85 500 Creditors $32 000
Non-Current Assets Non-Current Liabilities
Buildings $252 000 Loans $140 000
Machinery $62 000 Owner’s Equity
Capital $200 000
Retained Profit $57 500
i) Calculate the Debt to Equity Ratio (show all working).
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ii) Given that the industry average is 100%, comment on the gearing/solvency of Perfection Printing.
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7. Will Pay Pty Ltd
Cash at Bank $20 000 Accounts Payable $13 000

Accounts Receivable $15 000 Mortgage $50 000
Stock $30 000 Capital $50 000
Plant $30 000 Drawings $30 000
Overdraft $2 000 Commercial Bill $1 000
i) Calculate the Debt to Equity Ratio (show all working).
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ii) Comment on gearing/solvency of Will Pay Pty Ltd.
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Profitability – gross profit ratio (gross profit ÷ sales); net profit ratio (net profit
÷sales); return on equity ratio (net profit ÷ total equity)
1. Complete the summary for the Gross Profit Ratio
Compares …………………………… with ……………………………
Indicates p…………………………… from t……………………………
The formula is ……………………………
Usual standard or acceptable ratio is ……………, but varies across industries and is affected by sales
volume, mark up, purchase costs and level of COGS.
2. Complete the summary for the Net Profit Ratio
Compares …………………………… with ……………………………
Indicates p…………………………… after all e……………………………
Usual standard or acceptable ratio is ……………, (the higher the better) – but varies across industries
and is affected by GP ratio and level of expenses.
3. Complete the summary for the Return on Owners Equity Ratio

Compares …………………………… with ……………………………
Indicates how effective owners c…………………………… has been in generating
p……………………………
The higher the return the better – benefits of capital investment should be higher than
…………………………… investments (e.g. bank interest, return on property investment)

• Profitability
• Gross Profit
• Net Profit
Profitability Ratios exercises

5. The Olde Corner Shop has the following financial information.
Sales Revenue $120 000
COGS $90 000
Selling Expenses $2 000
Administrative Expenses $2 500
Financial Expenses $500
Industry averages
GPR 30%
NPR 15%
i) Calculate the Gross Profit Ratio (show all working).

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ii) Calculate the Net Profit Ratio (show all working).
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iii) Explain what the ratios indicate about profitability for the Olde Corner Shop.
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6. Complete the following statements.

Gross Profit Ratio = 80%. This means that ……………… cents out of every sales dollar stays in the
business and……………… cents of every sales dollar is used to pay COGS.
Net Profit Ratio = 28%. This means that for every $1 of sales, ……………… cents stays in the business
after all business expenses have been paid.

7. Study the information in the table.
Profit and Loss Statement – extract Other information

Revenue $2 000 Net Profit Ratio 5%
Cost of Goods Sold W Gross Profit Ratio 70%
Gross Profit X
i) Calculate the value of W.
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ii) Calculate value of X.
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iii) Comment on profitability for this business.
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8. Manar Pty Ltd is a large umbrella manufacturer and provides the following financial information (in $
millions)
Sales $50 Expenses

Cost of Goods Sold $20 Storage $10
Wages $5
Power $3
Other $2
Industry averages
GPR 50%
NPR 15%
i) Calculate Gross Profit (show all working).
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ii) Calculate Net Profit (show all working).
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iii) Comment on profitability of Manar Pty Ltd.
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9. S Mendez provides the following financial information for this year.

Opening Stock $50 000 Sales $300 000 Rent $20 000
Advertising $25 000 Insurance $8 000 Delivery costs $10 000
Purchases $60 000 Closing Stock $10 000 Electricity $2 000
Stationery $2 500 Wages $75 000 Toilet paper $2 500
Gross Profit = ………………………………………………………………………………….

Net Profit = …………………………………………………………………………………….
Gross Profit Ratio = ..………………………………………………………………………….
Net Profit Ratio = ………………………………………………………………………………
10. Nora’s Hair and Beauty provides the following financial information for this year.
Sales $300 000 Expenses $150 000

COGS $100 000 Owner’s Equity $200 000
i) Calculate the Return on Owners Equity Ratio (show all working).
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ii) Comment on the return to Nora for her investment in the business.
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Efficiency – expense ratio (total expenses ÷ sales), accounts receivable

turnover ratio (sales ÷ accounts receivable)
1. Complete the summary for the Total Expenses Ratio
Indicates efficiency in managing all e……………………………– the proportion of
…………………………… r……………………………left after all expenses have been paid.
Formula is ……………………………
The lower the ratio the better – the greater level of p…………………………… (left).
Individual expenses can be analysed by comparing them to sales – for example, comparing the wages
expense to …………………………… revenue measures efficiency in managing wages, comparing the
……………………………expense to sales measures the proportion of sales revenue used to pay
advertising costs.
2. Complete the summary for the Accounts Receivable Turnover Ratio

Indicates the effectiveness of the c……………………………policy and efficiency in collecting
d……………………………
Formula is……………………………
The usual credit period is………………days. Faster collection of debts indicates greater efficiency –
higher number of times a year (turnover) or fewer number of days (less than 30).

Efficiency Ratio exercises

3. Complete and comment on the efficiency of the following businesses.
Company A has accounts receivable of $3 390 and sales revenue of $33 285.
i) Accounts Receivable Turnover is ……………… times a year or ……………… days.
ii) Company B has an Accounts Receivable Turnover Ratio of 4.7 times per annum or …………. days.
iii) Comment on the efficiency of Company A compared to Company B.
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4. If a business has accounts receivable turnover of 9.5 times and its credit terms are 30 days, how
efficient is the business in collecting its debts?
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5. Calculate and comment on efficiency for the following business.
Yr 1 ($) Yr 2 ($) Yr 3 ($) Yr 4 ($)

621 200
Total Sales 570 000 599 800 666 300
Accounts
52 200 55 600 59 980 63 900
Receivable
Accounts
…… times or …… times or …… times or …… times or
Receivable
…….. days ………. days ………. days ………. days
Turnover Ratio
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6. Examine these trends in efficiency.
Yr1 Yr2
Total Expenses Ratio 25% 20%
Accounts Receivable Turnover Ratio 9 times 7 times
This business most likely experienced:
A) lower profits in Yr2 and improved its credit policy.

B) higher profits in Yr1 but needs to improve marketing.
C) higher profits in Yr2 but needs to improve credit policy.
D) higher profits in Yr2 but needs to reduce its stock.

7. ABS Construction Pty Ltd has provided the following financial data for Year 1 and Year 2.
Year 1 Year 2
Total Expenses $90 000 $105 000
Sales $285 000 $150 000
Accounts Receivable $45 000 $56 000
Which of the following statements about the efficiency of ABS Construction Pty Ltd is correct?
A) Both the expense ratio and the accounts receivable turnover ratio have deteriorated.
B) Both the expense ratio and the gross profit ratio have improved.
C) The expense ratio has deteriorated and the accounts receivable turnover ratio has improved.
D) The expense ratio has improved and the accounts receivable turnover ratio has deteriorated.
8. Select the most appropriate ratio (choose from any of the liquidity, profitability, solvency, efficiency
ratios) for assessing each of the following situations.
Situation Ratio
Marc and Robbie need to work out how well cash and other liquid assets
are contributing to the working capital for their pizza shop.
Kate and Amy want to determine whether their business has been a good
investment compared to investing in property.
James and Joseph operate a sailing school. They want to calculate how
much their spending on marketing affects their earnings.
Lillian and Mariko operate a wholesale business that imports and
distributes toys from Japan. They think they may need to change the credit
terms they offer their account customers.
Eric and Taka wish to open a second computer retail store. They want to
determine whether they are financially secure enough to borrow the
finance necessary to establish a new outlet.

9. Study the financial statements of Danielle’s Boutique. Evaluate the financial stability,
profitability and efficiency of the business.
Industry Averages
GPR – 40%
NPR 5%
Expense Ratio 35%
Debt to Equity 50%
Danielle’s Boutique
Balance Sheet as at 30 June 20XX
Assets Liabilities
Cash 20 000 Accounts Payable 25 000
Accounts Receivable 10 000 Non Current Liabilities
Inventories 20 000 Loan 20 000
Non Current Assets Owners Equity
Equipment 20 000 Capital 50 000
Machinery 30 000 Plus Profit 10 000
Less Drawings (5 000)
100 000 100 000
Danielle’s Boutique
Profit and Loss Statement for the year ended 30 June 20XX
Sales 150 000

Less Cost of Goods Sold
Opening Stock 15 000
+ Purchases 105 000
120 000
- Closing Stock 20 000 100 000
Gross Profit 50 000
Selling and Distribution Expenses
Advertising 1 000
Freight 1 000
Wages – Sales 21 000 23 000
General Expenses
Insurance 2 000
Rent 10 000 12 000
Financial Expenses
Interest on Loan 5 000 5 000 40 000
Net Profit 10 000

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10. Use the Revenue Statements for Joes Pty Ltd Year 1 and Year 2 to answer the following questions.
Year 1 Year2
Sales 305 000 362 000
Less COGS 155 500 222 500
GROSS PROFIT 149 500 139 500
Financial Expenses
• Interest 1 050 1 150
Selling Expenses
• Advertising 18 450 19 550
• Wages 36 000 45 200
Administrative Expenses
• Wages 34 500 37 000
• Electricity 1 100 1 200
• Insurance 4 800 5 300
• Lease 2 000 3 000
• Stationery 600 600
Total Expenses 98 500 113 000
Net Profit 51 000 26 500
NOTE: Industry net profit average = 10%

i) Calculate gross profit and net profit ratios for Yr1 and Yr2. Comment on the trend in profitability
over the 2 years.
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ii) Calculate an efficiency ratio using total expenses for Yr1 and Yr2. Comment on the businesses
efficiency in managing expenses.
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Comparative ratio analysis – over different time periods, against

standards, with similar businesses
1. Explain why businesses use comparative ratio analysis.
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2. Outline one method of undertaking a comparative ratio analysis.
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3. Use the Balance Sheets for Eden Hotel Pty Ltd Yr1 and Yr2 to answer the following question.
Yr1 Yr2
Current Assets
Cash 3 000 6 000
Accounts Receivable 4 000 5 000
Inventory 16 000 16 000
Total Current Assets 23 000 27 000
Non Current Assets
Equipment 13 000 13 000
Motor Vehicles 44 000 53 000
Total Non Current Assets 57 000 66 000
Current Liabilities
Bank Overdraft 2 000 3 000
Accounts Payable 2 000 4 000
Total Current Liabilities 4 000 7 000
Non Current Liabilities
Mortgage Loan 38 000 38 000
Total Non Current Liabilities 38 000 38 000
Owner’s Equity
Capital 20 000 20 000
Plus retained profits 28 000 40 000
Less drawings (10 000) (12 000)
Total Owners Equity 38 000 48 000
NOTE - Industry averages: Current Ratio is 200%, Debt to Equity is 90%

Assess the trend in financial stability by comparing current and debt to equity ratios with industry
averages.
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Limitations of financial reports – normalised earnings, capitalising expenses,

valuing assets, timing issues, debt repayments, notes to the financial
statements
1. Identify TWO limitations of financial reporting.
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2. Evaluate the validity of the information provided in financial reports.
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3. An accounting method where a business records an expense as an asset on the balance

sheet rather than as an expense on the income statement.
A) Capitalising expenses
B) Normalised expenses
C) Capitalising earnings
D) Normalised earnings
4. An explanation of accounting methods used on a financial statement can be found in the
A) notes to the report.

B) debt repayments.
C) timing issues.
D) valuing assets.

Ethical issues related to financial reports

1. Examine the importance of acting in an ethical manner when preparing financial reports
for a business.
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2. What does the process of auditing involve?
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Financial management strategies
• cash flow management

• working capital management
• profitability management
– revenue controls – marketing objectives
• global financial management
– exchange rates
– interest rates
– methods of international payment – payment in advance, letter of credit, clean payment, bill of
exchange
– hedging
– derivatives

Strategies
Cash flow management

1. Mrs Whoopee Ice Cream Van shows the following financial information in their cashflow
statement.
Jan. Feb. Mar. Apr. May Jun.
Open. Bal 100 ………. ………. ………. ………. ……….

Inflows 1 600 1 000 800 600 500 300
Outflows 1 150 950 650 550 450 1 400
i) Calculate the Opening Balance for February to June in the table.
ii) Identify the month in which a cash flow problem arose.
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iii) Outline TWO likely reasons for the cash flow problem.
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iv) Describe ONE strategy to overcome the cash flow problem.
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2. Justify an appropriate cash flow management strategy for each of the following situations below.
i) GG Fashions has experienced a cash shortfall for the months of December, January and February
owing to an increased number of customers purchasing goods on account.
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ii) Fine Furniture is required to pay its annual insurance premium of $100 000.
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iii) Unusual weather has seen the warehouse of Treat’s Ice Cream become overstocked with food
supplies.
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iv) MQR Ltd has decided to update its information technology equipment. The business does not have
the large amount of money needed to purchase this equipment.
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v) Thom and Associates Pty Ltd is a small law firm that has experienced increasing costs and frustration
with receiving payments from customers with outstanding debts. Currently the owner is spending too
much time working out debtor issues and not enough time on legal cases.
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3. Explain how the following strategies can assist businesses manage their cash flow.
i) Distribution of payments
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ii) Factoring
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iii) Offering discounts for early payment
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Working capital management

1. Complete the summary for management of current assets.
Current Problem Effects on the business Strategies/Solutions

Asset
High cash levels
Cash Insufficient cash
Accounts High amounts

Receivable owed by debtors
High stock levels
Stock Low stock levels
2. Explain how leasing can be used to improve working capital.
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3. Describe the strategy of sale and lease back.
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4. Outline an advantage and disadvantage of leasing assets rather than buying them.
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5. Proper Prints Pty Ltd has provided the following financial information.

Accounts Receivable $40 000 Overdraft $10 000
Inventory $85 500 Accounts Payable $32 000
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ii) Given that the industry average is 1.5:1, comment on the liquidity of Proper Prints.
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iii) Explain ONE strategy Proper Prints can use to move their current ratio closer to the industry
average.
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iv) Analyse the importance of controlling current liabilities to working capital management.
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6. Babe Piggeries 31 December 20XX

Cash $50 Overdraft $200
Accounts Receivable $700 Accounts Payable $1 000
Inventories $250 Non-Current Liabilities $4 000
Non-Current Assets $5 000 Owner’s Equity $800
$6 000 $6 000
i) Calculate the current ratio for the business.
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ii) You are one of Babe Piggeries suppliers. Explain whether you would continue to extend credit.
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iii) Outline ONE strategy the business could use to improve its working capital.
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iv) Examine the use of an overdraft to manage working capital.
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7. What is the most liquid asset held by a business?

A) Cash
B) Debtors
C) Creditors
D) Stock
8. The process of using current assets for day to day business operations is best described as:
A) factoring.
B) inventory control.
C) sale and lease back.
D) working capital management.
9. What is the purpose of strategies to manage working capital?
A) To pay off all debts as quickly as possible

B) To ensure that the business can pay its current liabilities as they fall due
C) To maximise profit
D) To maximise capital in the business
10. It has been recommended to Ken that he uses factoring.
Factoring is:
A) the selling of the business’s current debtors to a specialist debt collecting firm.
B) the selling of the business’s currents liabilities to a specialist debt collecting firm.
C) where a business reduces its total liabilities.
D) where a business increases its total assets.
11. What is the most appropriate strategy to control the cost of loans?
A) Obtain short-term loans instead of long-term loans

B) Ensure that loans are only used to purchase non-current assets
C) Organise repayment over as many years as possible
D) Shop around for the lowest interest rates and most suitable repayment terms for the business
12. What is the effect of sale and lease back of a non-current asset?
A) It will improve liquidity and reduce the value of non-current assets

B) It will improve liquidity and add to the value of total assets
C) It will reduce liquidity and improve solvency
D) It will improve solvency and reduce liquidity

13. What is a disadvantage of leasing equipment?
A) Increased tax paid on revenue earned from leased equipment

B) The business cannot fully control the assets
C) Maintenance is carried out by the firm providing the equipment
D) The value of business assets falls

Profitability management

– revenue controls – marketing objectives
1. The following information has been extracted from the Revenue Statements of Lea’s
Cosmetics for the past 3 years:
Year 1 ($m) Year 2 ($m) Year 3($m)

Sales 100 130 150
Less COGS 50 80 100
Gross Profit 50 50 50
Less Other Expenses
General and Administrative 10 10 10
Selling and Distribution 10 15 20
Financial 5 6 7
Net Profit 25 19 13
Refer to the information above to answer the following questions:
i) Analyse the trends in the profitability of Lea’s Cosmetics.
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ii) Recommend strategies to solve the problems that the business has with its profitability.
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iii) Distinguish between fixed and variable costs.
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iv) Explain the importance of identifying cost centres to profitability management.
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2. Discuss how the setting of marketing objectives impact on profitability management.
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3. Analyse the impacts of using expense minimisation as a profitability management strategy.
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Global financial management
– exchange rates
– interest rates
– methods of international payment – payment in advance, letter of credit, clean payment, bill of
exchange
– hedging
– derivatives

Exchange rates
1. Study the table that shows the exchange rate for the Australian Dollar (AUD) against a range of
currencies. Use the information to answer the questions that follow.
04 Dec 20XX 05 Dec 20XX 06 Dec 20XX 07 Dec 20XX 08 Dec 20XX
United States dollar 0.7866 0.7879 0.7875 0.7891 0.7893
Japanese yen 91.03 90.92 90.34 90.69 90.92
European euro 0.5906 0.5912 0.5910 0.5930 0.5940
South Korean won 729.81 729.91 724.11 724.39 726.67
New Zealand dollar 1.1436 1.1437 1.1460 1.1468 1.1447
i) State whether the AUD appreciated or depreciated against the following currencies between the 5th of
December and the 6th December 20XX.
Circle correct option

United States Dollar (USD): Appreciated Depreciated
Japanese Yen: Appreciated Depreciated
European Euro: Appreciated Depreciated
South Korean Won: Appreciated Depreciated
NZ Dollar: Appreciated Depreciated
ii) Which of the following statements is true for the 5th December?
A) The AUD depreciated against the USD
B) Imports from the USA to Australia would have been more expensive
C) Australian exporters would have become less competitive in the USA
D) Australian businesses with loans to USA banks would be worse off
iii) Which of the following statements is true in relation to the 8th of December?
A) The AUD depreciated against all of the currencies

B) The AUD appreciated against all of the currencies
C) Australian exports to New Zealand would have become cheaper
D) Imports to Australia would have become more expensive

2. Discuss the possible effects on Australian businesses of an appreciation of the AUD against
the US dollar.
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3. Analyse the impacts of a depreciation of the Australian dollar against the USD for an Australian
business that has borrowed funds from a US bank.
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4. Complete the table below to summarise the effects of an appreciation and depreciation of the
Australian dollar by stating either INCREASE or DECREASE.
Appreciation Depreciation
Price of Australian
exports
Revenues of domestic
Sales, Costs and Competitiveness of Australian
businesses who export,

if they are competing on
price
Overall international
competitiveness of
domestic businesses
Businesses
who sell globally

Price of imports to
Australia
Costs of domestic
businesses who rely on
imports for their inputs
Competitiveness of
domestic businesses
who compete against
overseas businesses
Size of debt borrowed

Size of overseas debt
from overseas financial

institutions
and interest
repayments
Size of interest
repayments on foreign
borrowings
Value of overseas assets

revenue from overseas operations
owned by Australian
Value of Assets overseas and
businesses
Value of overseas
revenue earned by
Australian businesses

Interest rates
1. Examine the importance of interest rates as a global financial management issue.
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2. Explain how interest rates may affect the decisions made by financial managers in a business.
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Methods of international payment – payment in advance, letter

of credit, clean payment, bill of exchange
1. Complete the table below to summarise the methods of payment by either identifying the method or
providing a definition.
Methods of Payment Description

Payment is received for goods before they are
sent. Most secure payment and less risk for
exporter. Importer has all the risk of the goods
never being sent, however an early payment by
importer may encourage a discount.
Letter of Credit
Bill of Exchange
Goods are shipped before payment is received.

The most risk is for the exporter to trust the
importer to pay at a later date and should only be
used when a high level of trust and history
between the businesses exits.
2. Outline one method of payment that has a low level of risk for the exporter of the good.
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3. On the graph identify which methods of payment have the highest and lowest risk to importers and
exporters.
High
Exporter’s
Risk
Low
Low High
Importer’s Risk
4.“All businesses who trade globally are taking a financial risk. Some methods have higher risk levels
than others”.
Explain what is meant by this statement in relation to methods of payment.
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5. Identify the risks to an importer if a payment in advanced is used.

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6. Which method of payment has the least payment risk for an exporter?
A) Letter of credit
B) Payment in advance
C) Clean payment
D) Derivative
7. Which method of payment has the least payment risk for an importer?
A) Letter of credit
B) Payment in advance
C) Clean payment
D) Derivative
8. A problem with clean payment as a method of international payment is?
A) the exporter may not send the goods.

B) the importer may not pay for the goods.
C) financial intermediaries may without hold payment on the goods.
D) the importer must pay for the goods in advance.

Hedging and derivatives
1. An Australian business manager would like to export barcode scanners. However, they are concerned
about currency fluctuations. Explain how this risk could be reduced.
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• Hedging
• Derivatives
3. What is the purpose of hedging?
A) It is a type of insurance to protect the value of goods

B) It is a financial tool to reduce the financial risks caused by currency fluctuations
C) It is used to determine the return on overseas investments
D) It identifies investments that are too risky

4. Analyse the impacts of using derivatives as a method for reducing financial risk when
operating in a global market.
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5. Explain how hedging can reduce the impacts of price fluctuations for businesses operating in a global
market place.
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6. Complete the passage below using the following words: advantage, actually, currency, reverse,
agreed
Forward Exchange Contracts – is a contract where the bank will guarantee the exporter to exchange
one currency for another at an…………………………… exchange rate on a future date. This rate will be
paid regardless of what the exchange rate ……………………………is on the agreed date.
Currency Option Contracts – gives the business the option or right to buy or sell foreign
…………………………… when the exchange rate movements is to its ……………………………
Swap Contract - Where currency is exchanged in the spot market (the value of one currency in another
currency on a particular day) with an agreement to …………………………… the transaction in the
future.

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Ravenswood School For Girls - valid one year from Friday, 3 February 2023

WORKSHEETS FOR NSW BUSINESS STUDIES

From the syllabus

Printable Worksheets – Finance © Resource Factory 2023

A Glossary of Key Words .......................................................................................................................1

Past HSC Questions Relevant to Finance ..............................................................................................4

Vocabulary List .......................................................................................................................................5

Strategic role of financial management.............................................................................................11

Objectives of financial management .................................................................................................13

Interdependence with other key business functions .........................................................................15

Internal sources of finance – retained profits ....................................................................................17

External sources of finance ...............................................................................................................18

Influence of government – Australian Securities and Investments Commission, company taxation25

Monitoring and controlling ..............................................................................................................36

Financial ratios ..................................................................................................................................44

Ethical issues related to financial reports ..........................................................................................68

Cash flow management.....................................................................................................................70

Working capital management ...........................................................................................................73

Global financial management ...........................................................................................................83

Printable Worksheets – Finance © Resource Factory 2023

A Glossary of Key Words

Key words Meaning

Printable Worksheets – Finance -1- © Resource Factory 2023

H2 evaluates management strategies in response to changes in internal and external influences

Students learn to:

examine contemporary business issues to:

• explain potential conflicts between short-term and long-term financial objectives

• calculate key financial ratios

Students learn about:

Role of financial management

• strategic role of financial management

Printable Worksheets – Finance -2- © Resource Factory 2023

Influences on financial management

Processes of financial management

Financial management strategies

Printable Worksheets – Finance -3- © Resource Factory 2023

Past HSC Questions Relevant to Finance

Multiple Choice Short Answer Section III & IV

Processes 2013 Q4, Q10, Q16 2012 Q22a-c 2016 Q26

Strategies 2012 Q8, Q20 2013 Q24a, b 2013 Q26

Printable Worksheets – Finance -4- © Resource Factory 2023

Printable Worksheets – Finance -5- © Resource Factory 2023

Share purchase plans

Printable Worksheets – Finance -6- © Resource Factory 2023

Cash flow statement

Debt to equity ratio

Printable Worksheets – Finance -7- © Resource Factory 2023

Cost of Goods Sold

Gross profit ratio

Net profit ratio

Return on equity ratio

Discounts for early

Sale and lease back

Printable Worksheets – Finance -8- © Resource Factory 2023

Printable Worksheets – Finance -9- © Resource Factory 2023

Printable Worksheets – Finance - 10 - © Resource Factory 2023

Student Activities by Dot-point

• strategic role of financial management

Strategic role of financial management

2. Outline the strategic role of financial management.

Printable Worksheets – Finance - 11 - © Resource Factory 2023

3. Discuss the importance of financial management to the success of a business.

Printable Worksheets – Finance - 12 - © Resource Factory 2023

Objectives of financial management