This is the final step in your learning journey, get ready to smash this quiz and leave with the competencies to make informed decisions as a Coca-Cola stakeholder. Good luck!
1
What is the primary source of revenue for most businesses?
2
Which of the following best describes Non-Controlling Interest (NCI)?
3
What does a high gearing ratio indicate about a company?
4
Which of the following is NOT included in Other Comprehensive Income (OCI)?
5
What is the main purpose of calculating the gearing ratio?
6
What do we call the additional value a purchasing company believes the purchased company is worth, and therefore pays an amount above the fair value for?
7
What do retained earnings represent in a company's financial statements?
8
Why are operating activities important to Coca-Cola's financial performance?
9
Fill in the Blanks!
Under IFRS, gross profit is the difference between __________ and the __________. It indicates how efficiently a company produces and sells its goods or services, before accounting for operating expenses, taxes, and other non-operating items.
10
What does net income represent in a company's financial statements?
11
True or False : According to IFRS, commitments are recognised as liabilities on the statement of financial position, while contingencies are only disclosed in the notes to the financial statements because their outcome is uncertain.
12
Which of the following is an example of a cash inflow in financing activities?
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Revenue refers to income arising in the course of an entity’s ordinary activities.
Revenue is essential for covering costs, investing in growth, and generating profit, a key indicator of a company’s performances. The sale of goods or services are the primary sources of income for majority of the businesses in the world. As most companies operating activities revolve around producing and selling good and services.
Non-controlling interests is equity in a subsidiary not attributable, directly or indirectly, to a parent, presented in consolidated financial statements. It is essentially the portion of a subsidiary (an entity we partially own) that we do not own.
A higher gearing ratio indicates a greater reliance on debt, which can increase financial risk. This indicates high financial leverage.
Look at our provided example of the Consolidated Statement of Other Comprehensive Income on slide 2 of our provided flashcards!
The gearing ratio is used to measure how much of a company's capital is financed by interest bearing debt, and how much is financed by share capital. This is therefore an evaluation of capital.
Goodwill is an intangible asset that is created when one company is purchased by another. It is the additional amount of the purchase price that is higher than the “sum on the net fair value of all the assets purchased in the acquisition and the liabilities assumed in the process”. To put it simply, it is the additional value the purchasing company believes the purchased company is worth and therefore pays an amount about the fair value as “goodwill”.
Retained earnings represent the accumulated portion of a company’s profits that are not distributed as dividends to shareholders but instead are reinvested in the business or kept for future use
Under IFRS, gross profit is defined as the difference between revenue and the cost of goods sold (COGS). It represents the profit a company makes after deducting the costs directly associated with the production of goods or services sold, but before accounting for operating expenses, interest, taxes, and other non-operating items. Gross profit is a key indicator of a company's basic profitability and efficiency in producing and selling its products or services. It does not include other costs such as operating expenses, taxes, and interest expenses, which are considered in other profitability measures like operating profit and net profit.
Net income is the final measure of a company's profitability. It represents the total profit or loss after all expenses, including operating expenses, interest, taxes, and other non-operating items, have been deducted from total revenue. Net income is reported on in the Statement of Operations and is a key indicator of a company's overall financial performance. It reflects the company's ability to generate profit after all costs have been accounted for, and it's crucial for assessing the company's profitability and financial health.
Commitments refer to financial obligations that a company has legally or contractually agreed to fulfil. In contrast, contingencies depend on the occurrence or non-occurrence of a future event. According to IFRS standards, commitments are recognised as liabilities on the statement of financial position (or consolidated balance sheet) and disclosed in the notes. Contingencies, however, are only disclosed in the financial statement notes, as their realisation remains uncertain.
Issuing new equity, such as offering new shares to investors, brings cash into the company and is therefore considered a cash inflow in financing activities. Repaying loans, paying dividends, and repurchasing outstanding shares all involve cash leaving the company, making them cash outflows in financing activities.
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