Page 246 - Cambridge IGCSE Business Studies

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Section 5:

Financial information

and decisions

Just as you need money to finance your purchasing decisions, so to do
businesses. Finance is needed for such things as start-up capital, to pay
day-to-day expenses and to finance growth plans. In this section you will learn

about the different sources of finance available to businesses and how they
might choose the most appropriate source for a given situation. Profit is not the
same as cash and this will be explained, as will how a business might use cash

flow forecasts to effectively manage its cash balances. All businesses will need
to produce financial statements and you will learn about the main elements of

income statements and balance sheets and how different stakeholders might
use the information contained in them. By the end of this section you will have
learned how to use ratio analysis to interpret a business’s financial statements
so that you are able to make reasoned judgement about their performance.