The finance part in this exam is relatively small, but remember there will always bequestions on it. Likely areas to be covered are ratios and sources of finance!No mental blocks to finance allowed!! You know everything that we are going to gothrough this lesson so you should find it easy!!The finance question is normally number 7 and will normally be similar to below:Now that we know the format we now need to look at the two areas that will possiblycome up!RatiosThe two ratios that may come up in the exam are:__________________________________________________________________________________________________________________________________________What is the purpose of the Current Ratio?____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________Year 11 Case StudyThe Finance Part
The current ratio gives us a measure of Virgin’s ________________________What are the three reasons for needing adequate working capital?________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________What is the calculation for the current ratio?What is Virgin’s Current Ratio for 2006?
What is Virgin’s Current Ratio for 2007?What should it be between?Why?Why will Virgin’s Current Ratio be an issue?What is the calculation for the Acid Test Ratio and what does it show?
Sources of FinanceSources of Finance Mind MapTASKTIMEAdd the different sources of finance to the table and tick which type of ownershipeach can be used by.SoleTraderPartnership Ltd PLC FranchiseSources ofFinance
What sources of finance would apply to Virgin?Evaluate the most appropriate source of finance open to Virgin for the expansionof the business (8 marks)Plan your answer in the box below and write it in the required exam format forhomework