Select all the statements that are TRUE?
(1) Short-term nancing refers to
externally generated funds that are used
by organisations to nance their
cyclical/seasonal needs or funding that
are utilised when an organisation
experiences a cash shortfall.
(2) Long-term loans (private debt) are
normally negotiated directly between the
borrowing organisation and the lending
organisation.
(3) Credit rating agencies such as
Standard & Poor and Fitch are
organisations that provide international
nancial research on bonds and other
debt instruments that are issued by
governments and other organisations.
(4) A debenture or bond is a short-term
contract between the organisation that
issues it and the buyer thereof.
(a) Statements (1), (2) and (3)
(b) Statements (1) and (2)
Select the combination of the following
statements regarding growth rate as
applied in ratio analysis that are all TRUE.
(1) Further comparison and investigation
should be done when there is an increase
or decrease in the growth rate for the
result to be sensible.
(2) Growth rate refers to the percentage
that a line item in the nancial
information of an organisation has
increased or decreased from one period
to another.
(3) Growth rates could not be used in
conjunction with other ratios that were
analysed to help clarify the results.
(4) The growth rate can provide an
indication of the success of an
organisation’s operations over several
periods or years.
(5) Growth rates can only be calculated
on gures in the statement of pro t or
loss and other comprehensive income.
(a) Statements (1), (2) and (3)
(b) Statement (1), (3) and (4)
(c) Statements (1), (2) and (4)
(d) Statement (1), (2), (3) and (5)
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