1. Indicate if you agree with the following statements and give reasons for your answers: 1.1 An analysis of the financial statements of a business is an important aid to planning and decision- making. (2) 1.2 By analysing financial statements over two years, you can better determine business growth and development. (2) 1.3 The business can adjust its policy on the management of current assets based on the analysis of statements. (2) 1.4 Suppliers of borrowed capital are interested in the activity ratios and solvency ratios. (2) 2. Explain what is measured when analysing the following business ratios and mention at least two ratios each: o Liquidity ratios (4) o Activity ratios (4) o Profitability ratios (4)

Evidence 1: Jane's Events *Cover page, Table of Contents, Introduction, Structure, Layout and References (10) Analysis of financial statements [60] 1. Indicate if you agree with the following statements and give reasons for your answers: 1.1 An analysis of the financial statements of a business is an important aid to planning and decisionmaking. (2) 1.2 By analysing financial statements over two years, you can better determine business growth and development. (2) 1.3 The business can adjust its policy on the management of current assets based on the analysis of statements. (2) 1.4 Suppliers of borrowed capital are interested in the activity ratios and solvency ratios. (2) 2. Explain what is measured when analysing the following business ratios and mention at least two ratios each: - Liquidity ratios (4) - Activity ratios (4) - Profitability ratios (4) \begin{tabular}{|l|l|l|l|l|} \hline Accountant's fee & 25500 & & 800 & \\ \hline Security & 4448 & & 2699 & \\ \hline Cleaning costs & 4912 & & 2738 & \\ \hline Stationery & 4330 & & 2524 & \\ \hline Datamanagementcosts & 4231 & & 2250 & \\ \hline Telephone & 5005 & & 2308 & \\ \hline Transportanddeliveries & 20 & 596 & 12 & \\ \hline Insurance & 15 & 562 & \\ \hline EBIT & 246 & 12 & \\ \hline \end{tabular} Credit sales equals 20% of Sales