Lesson 1.2.2

1.2.2 Financial Aims and Objectives Quiz: NCFE Business & Enterprise, Unit 1

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Financial aims are targets measured in money. This lesson covers revenue, costs, profit and margin, the value of a business, tangible and intangible assets, and the difference between liquidity, cash flow and solvency, including why a profitable firm can still run short of cash.

Key points

  • Revenue is price multiplied by quantity sold, so with fixed prices it rises only by selling more.
  • Cutting costs means less money leaves the business, for example through cheaper beans, route planning or leasing equipment.
  • Profit per unit is the selling price minus the total cost of making that unit.
  • Tangible assets can be touched, such as vans and ovens; intangible assets, such as patents and brand, cannot.
  • The value of a business is what a buyer would pay, and a strong brand and loyal customers raise it.
  • Liquidity is the ability to pay short-term bills when they fall due, which is different from being profitable.
  • A firm is solvent when its assets are worth more than its debts, and insolvent when they are not.

Key terms

Revenue
The money coming in from selling goods and services, measured before costs are taken off.
Profit margin
The gap between the selling price of a unit and what it costs to make.
Cash flow
The timing of money actually moving into and out of the business bank account.
Liquidity
How easily a firm can find cash to pay debts that are due soon.
Solvent
Having assets worth more than total debts, so the firm can keep trading.
Tangible asset
A physical item the business owns, such as vehicles, buildings or stock.
Intangible asset
A valuable asset with no physical form, such as a patent, brand or customer loyalty.

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The 20 questions

  1. Financial aims and objectives set targets for which factors?

    • Office location choice
    • Logo design styles
    • Staff dress code
    • Revenue and costs

  2. How can a café raise revenue without changing its prices?

    • Stop buying ingredients
    • Reduce opening hours
    • Increase spend per visit
    • Sack all staff

  3. Which action would directly help a bakery lower its costs?

    • Lease the ovens
    • Open on Sundays
    • Raise product prices
    • Launch a marketing campaign

  4. A candle sells for £8.00. The materials, labour and overheads in each one come to £5.50. What is the profit per unit?

    • £2.50
    • £1.45
    • £13.50
    • £5.50

  5. Which item listed by a firm is an intangible asset?

    • Bank cash
    • Patent
    • Factory building
    • Delivery van

  6. In business finance, what does liquidity measure?

    • Ability to pay debts
    • Value of machinery
    • Total annual profit
    • Market share size

  7. What does business cash flow actually measure?

    • Total profit
    • Retained earnings
    • Money movement
    • Net assets

  8. A firm sets the target 'cut what we pay suppliers by 10% this year'. Which financial objective is that?

    • Increase its value
    • Improve its liquidity
    • Decrease its costs
    • Increase its revenue

  9. Which of these is classified as a tangible asset for a bakery?

    • Business copyright
    • Delivery vans
    • Customer loyalty
    • Brand strength

  10. What is the primary objective when a firm aims to increase its value?

    • Maximise daily output
    • Maximise business worth
    • Minimise fixed costs
    • Increase loan capital

  11. What does revenue measure in a business?

    • Total retained earnings
    • Money from sales
    • Shareholder dividend total
    • Net annual profit

  12. Which action is most likely to increase a sandwich shop's sales revenue?

    • Sourcing cheaper bread
    • Negotiating lower rent
    • Opening longer hours
    • Reducing staff wages

  13. Which action would best help a delivery firm reduce its operating costs?

    • Planning shorter routes
    • Increasing advertising spend
    • Raising driver wages
    • Expanding delivery areas

  14. Which action would widen the profit margin a café earns on its coffee?

    • Renting a larger shop
    • Hiring more staff
    • Buying cheaper beans
    • Lowering selling prices

  15. What best explains why two firms with equal profit have different business values?

    • Recent tax increases
    • Higher daily expenses
    • Strong brand reputation
    • Lower monthly sales

  16. Why is increasing business value an important aim for owners?

    • Lowers wage costs
    • Increases daily stock
    • Raises sale payout
    • Reduces tax bills

  17. What does poor liquidity indicate about a business?

    • Struggling to pay bills
    • Lacking customer demand
    • Holding excessive profits
    • Making permanent losses

  18. What does it mean for a business to be solvent?

    • Sales exceed targets
    • Cash exceeds profit
    • Assets exceed debts
    • Revenue exceeds costs

  19. Why might a profitable business still run out of cash?

    • High profit margins
    • Late customer payments
    • Low selling prices
    • Excessive bank interest

  20. Which of these is a financial objective rather than a non-financial one?

    • Improving staff morale
    • Boosting ethical status
    • Reducing carbon emissions
    • Cutting unit costs

All NCFE Business & Enterprise quizzes