Search for notes by fellow students, in your own course and all over the country.

Browse our notes for titles which look like what you need, you can preview any of the notes via a sample of the contents. After you're happy these are the notes you're after simply pop them into your shopping cart.

My Basket

You have nothing in your shopping cart yet.

Title: BTEC Business Level 3, Unit 2, P5
Description: BTEC Level 3 Business notes for Unit 2: Business Resources and this is for the P5 grade. This was achieved first time so covers it all. This covers accounting ratios, explaining trading and profit and loss accounts, balance sheet, and accounting ratios. This is based around Next PLC as this is what my institution used, but can easily be adapted.

Document Preview

Extracts from the notes are below, to see the PDF you'll receive please use the links above


Ashleigh Still
Factsheet 2- P5

Unit 2: Business Resources
Magda King

Accounting Ratios
Trading and Profit and Loss Accounts
Trading and profit and loss accounts show how much money has been made at the end of the
financial year
...
This can help Next set their budget for the next financial year
...
As Next is a large company, the profit and loss
account could end up being quite complicated
...
This account can show how much profit Next can
generate, which can help them set their budget
...
It is simply a
statement that outlines the fixed assets, current assets and liabilities
...
The liabilities are the various
amount of money that is owned by Next
...
This includes land, buildings, vehicles and equipment
...

Accounting Ratios
Current Ratio/Solvency
Current ratio shows how many assets a business has compared to its liabilities
...

Current ratio = current assets / current liabilities
NEXT
Current assets = £23
...
8m
£23
...
8m = 0
...
A good current ratio would be 2 as this means that for
every liability, the company has 2 assets to cover it
...
To do this,

Ashleigh Still
Factsheet 2- P5

Unit 2: Business Resources
Magda King

they need to reduce their liabilities or increase their assets
...

Acid Test Ratio
The acid test ratio shows the company’s assets as compared to their liabilities
...

Acid test ratio = current assets – stock / current liabilities
NEXT
Current assets – stock = £23
...
4m = £16
...
8m
£16
...
8m = £0
...
To
improve their ratio, Next need to reduce their liabilities or invest in assets to bring their ratio
closer to 1
...

Next PLC can use the acid test ratio to understand their financial state in regards to their
assets, stock and liabilities
...
To do this, Next need to bring their acid test ratio to around 1 but
shouldn’t go over that and should stay well away from 2, as this means they have too much
money spent and wasted on their assets
...



Title: BTEC Business Level 3, Unit 2, P5
Description: BTEC Level 3 Business notes for Unit 2: Business Resources and this is for the P5 grade. This was achieved first time so covers it all. This covers accounting ratios, explaining trading and profit and loss accounts, balance sheet, and accounting ratios. This is based around Next PLC as this is what my institution used, but can easily be adapted.