Practise using finance evidence to choose funding sources, complete cash-flow and break-even calculations, and interpret accounts for decisions.
Lavender, a Malaysian business, started with bakery, patisserie and takeaway shops. It has now developed into several other businesses. L.café is a self-serve café selling a variety of cakes and drinks. L.bistro is a casual dining place with a selection of Asian foods. L.table is a formal restaurant that uses high quality and organic ingredients.
(Source adapted from: https://www.lavender.com.my/about-us-c1kfx)
Which one of the following would be a source of finance that could be used for a cash flow problem?
Select one answer.
Venture capital
Overdraft
Debenture
Leasing
Which one of the following is an example of a fixed cost for Lavender?
Select one answer.
Flour used in the cakes
Packaging used for Lavender's cakes
Sugar used in production
Rent for Lavender's businesses
Lavender calculates the cost of the cakes it makes. The weekly fixed cost is
759 MYR. The variable cost per cake is 4.70 MYR.
Calculate the total cost of selling 1,650 cakes in a week.
Select one answer.
2413.70
3567.30
7755.00
8514.00
Define the term short-term finance.
Outline one reason why cash might be important to Artify Studio.
Figure 1 is an extract from the Artify Studio statement of profit and loss.
Figure 1
Calculate, to two decimal places, the gross profit margin for Artify Studio. You are advised to show your working.
Analyse how Artify Studio could use the information in Figure 1 to assess the performance of the business.
Nantgwynfaen Organic Farm (NOF) is a farm growing a range of fruit and vegetables. It has a farm shop and offers accommodation with breakfast. It was set up by Amanda and Ken Edwards in West Wales, UK.
NOF supports farmers by selling local organic produce in its farm shop. The produce from the farm shop is served to the visitors staying overnight at the farm.
NOF is committed to being environmentally friendly by recycling, avoiding the use of packaging and reducing the use of electricity.
Which one of the following is an external source of finance?
Select one answer.
Personal savings
Retained profit
Bank loan
Selling assets
NOF buys honey from a local farm for £1.60 a jar and sells it to customers for £3.60.
What is the markup on a jar of honey?
Select one answer.
1.6%
2%
125%
250%
Define the term profit.
Define the term non-current liabilities.
Figure 1 is an extract from N O F^ s statement of comprehensive income.
Figure 1
Calculate the operating profit margin. You are advised to show your working.
\%
Artify Studio was set up in 2015 by Tay Hui Jae in the busy Kampong Glam area of Singapore. Artify Studio's aim is to have 'a communal art space where people can come together and paint, where people would be given as much creative freedom as they would have if they were in their own spaces.'
Artify Studio provides many services including its popular Liberty Art Jam where customers can paint as well as listen to music. The studio offers a Corporate Art Jam and Regular Kids Classes. Customers can purchase art materials after attending the studio.
Artify Studio is a profit-making organisation with a social element. It employs seven part-time people, all of whom are art enthusiasts.
Which one of the following is an internal source of finance?
Select one answer.
Overdraft
Selling assets
Venture capital
Crowdfunding
Which one of the following is a main feature of the statement of comprehensive income?
Select one answer.
Current assets
Non-current liabilities
Cost of sales
Capital employed
Running the Liberty Art Jam costs Artify Studio S$10 Singapore Dollars (SGD). People attending the course are charged S$35.
What markup has Artify Studio applied to this service?
Select one answer.
35%
45%
250%
350%