CAIE IGCSE Business 0264 - Paper 1

5.4 Statement of financial position

Topical Past-Paper Questions

Why it’s here: Assets, liabilities, equity and interpreting a business financial position.

CAIE IGCSE Business 0264 Paper 1 Topic 5.4

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Key concepts to revise

The main ideas to know for 5.4 Statement of financial position.

Assets

Non-current and current assets are resources owned by the business.

Liabilities

Current and non-current liabilities are amounts owed by the business.

Equity

Owner or shareholder funds represent the residual interest in the business.

Financial position

The statement shows what the business owns, owes and how it is financed.

About this topic

Statement of financial position includes selected 0450 questions that continue to align with the Cambridge IGCSE Business 0264 syllabus.

Keep every answer connected to the business in the case study.

Use the case-study evidence
Develop each explanation fully
Show working for calculations
Justify the final recommendation

Before you begin

1Read the command word
2Check the marks available
3Study every table or figure
4Apply the answer to the business

Exam material

Past-paper questions

Past-paper question 0450/11/O/N/25 [2] marks

CPW is a private sector business which has many objectives. It sells electrical goods including kettles and ovens in its 36 shops in country X. CPW also offers a delivery service. The business buys all its inventory from local suppliers to avoid import tariffs. The Finance Director is analysing CPW’s statement of financial position. An extract is shown in Table 2.1. He has been asked to find a source of finance to purchase 10 new delivery vehicles.

Extract from CPW’s statement of financial position for 2024 ($ million)

Non-current assets	120
Current assets	70
Current liabilities	110
Non-current liabilities	75

Table 2.1

b) Identify one non-current asset and one current liability. [2] Non-Current Assets: Current Liability:

Open question

Past-paper question 0450/12/M/J/24

IDT manufactures clothes for the mass market. It is a multinational company with factories in 4 countries. IDT has short-term and long-term financial needs. The Finance Director is analysing IDT’s statement of financial position. An extract is shown in Table 3.1. He has been asked to calculate working capital and to explain how an increase in non-current liabilities might affect IDT.

Extract from IDT’s statement of financial position ($ million)

	2022	2023
Current assets	380	420
Current liabilities	250	280
Non-current liabilities	300	400

Table 3.1

d) Explain two ways an increase in non-current liabilities might affect IDT. Way 1: Explanation: Way 2: Explanation:

Open question