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Assessing a business
Junior cert business studies
| Term | Definition |
|---|---|
| Shareholders | they are particularly interested in how profitable the company has been. The more profit made, the more dividend received= |
| Banks and financial institutions | before giving a loan or overdraft to a company they will want to know the company’s credit rating, their existing level of debt and their ability to repay= |
| The Revenue Commissioners | the tax authority will want to make sure that the company is paying the correct level of corporation tax and VAT= |
| Creditors | are particularly interested in the company’s credit rating and how quickly the company pays its creditors= |
| Employees and trade unions | will want to know the ability of the company to continue to pay the existing wages of employees. They will also want to know the security of employment for the employees= |
| Profitability | This examines the return (percentage profit) to the business on the money available to it and the return on its sales. The information for this is found in the balance sheet and in the trading and profit and loss account= |
| Solvency | The opposite to being solvent is ‘insolvent’ or ‘bankrupt’ when the business owes more than it can repay and is forced to close= |
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athlonebusinessstudies
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