Business finance: Practice Questions

A company is evaluating its expenditure for the last quarter. Which of the following would be correctly classified as capital expenditure?

In the context of business finance, which of the following best distinguishes capital expenditure from revenue expenditure?

A company is reviewing its business finance requirements. It needs to distinguish between spending on assets that will remain in the business for more than one year and daily operational costs.

Which of the following correctly identifies an example of capital expenditure?

A business is facing a severe liquidity crisis and is unable to meet its short-term debts. It enters a legal process where an external professional is appointed to take control of the company with the aim of rescuing it as a going concern. This process is known as:

A business has a current ratio of \(1.2:1\) but is struggling to pay its suppliers on time. Its trade payables have increased from 30 days to 60 days over the last year. Which of the following strategies would best improve the firm's working capital position without increasing its long-term liabilities?

Explain the difference between capital expenditure and revenue expenditure, providing one specific example of how each would be recorded in a business's financial records.

Discuss the importance of working capital management for a rapidly growing business, specifically explaining the risk of overtrading if trade receivables are not collected efficiently.