Financial Management-11

Financial Management


Multiple Choice Multiple Answer
Question Limitations of cash flow analysis are
Correct Answer It cannot be equated with the income statement , Cannot replace the fund flow statement , Dose not represent real liquid position
Your Answer It cannot be equated with the income statement , Cannot replace the fund flow statement


Select The Blank
Question A list of all the material required for a job, process or production order is termed as ________.
Correct Answer Bill of materials
Your Answer Bill of materials


Select The Blank
Question ________ in liabilities involves outflow of funds
Correct Answer Decrease
Your Answer Increase


True/False
Question Income tax paid in the case of sole proprietor firms should be treated as a personal expense of the proprietor
Correct Answer True
Your Answer True


Multiple Choice Multiple Answer
Question The internal factors affecting the dividend policy are
Correct Answer Growth rate of the company , Composition of the shareholding
Your Answer Growth rate of the company , Composition of the shareholding


Multiple Choice Multiple Answer
Question The assumptions for the theories of capital structure are
Correct Answer Firm use only long term debt capital or equity share capital to raise funds , Firm follow policy of paying 100% of its earnings by way of dividend , Operating earnings are not expected to grow
Your Answer Firm use only long term debt capital or equity share capital to raise funds , Firm follow policy of paying 100% of its earnings by way of dividend


Multiple Choice Single Answer
Question Credit period is
Correct Answer the time allowed by the company to the customers to pay their dues
Your Answer the time allowed by the company to the customers to pay their dues


Multiple Choice Multiple Answer
Question Advantages of letter of credit to the Importer
Correct Answer the importer can bargain for better trading terms , he is assured to get proper supply of the goods
Your Answer the importer can bargain for better trading terms , he is assured to get proper supply of the goods


Multiple Choice Single Answer
Question From company's point of view return paid on own capital is
Correct Answer is not a tax deductible expenditure
Your Answer calculated from Profit before tax


Multiple Choice Multiple Answer
Question The advantages of operating lease is
Correct Answer In an operating lease arrangement the equipment risk is transferred to the lessor , It minimizes investment in equipment , Reduces expenditure on maintenance
Your Answer In an operating lease arrangement the equipment risk is transferred to the lessor , It minimizes investment in equipment


True/False
Question One of the basic objectives of cash management is to maintain the optimum cash balance
Correct Answer True
Your Answer True


Multiple Choice Single Answer
Question The Proprietary concern is owned by
Correct Answer Only one person
Your Answer Minimum 50 persons


Multiple Choice Single Answer
Question How many days in a year are to be considered for the calculation of daily sales
Correct Answer 360
Your Answer 365


True/False
Question If the process of capital rationing is strictly followed it may result into the exclusion of various smaller projects by larger projects
Correct Answer True
Your Answer True


Select The Blank
Question ________ in assets involves inflow of funds
Correct Answer Decrease
Your Answer Increase


Multiple Choice Multiple Answer
Question The depreciation is being charged for the following assets
Correct Answer Plant and Machinery , Building
Your Answer Plant and Machinery , Building , Land


True/False
Question Current ratio and Acid test ratio are categorised under liquidity group
Correct Answer True
Your Answer True


Multiple Choice Single Answer
Question The weighted average cost of capital is referred to as
Correct Answer Average cost
Your Answer Component cost


Select The Blank
Question Break even point is that level of sales revenue at which there is ________
Correct Answer no profit no loss
Your Answer no profit no loss


Multiple Choice Single Answer
Question The amount of cheques issued by the company awaiting payment by the bank is called as
Correct Answer Payment float
Your Answer Postal float


True/False
Question Operating leverage is calculated as Earnings Before Interest and Tax / ( Earnings before Interest and Tax - Interest )
Correct Answer False
Your Answer True


Multiple Choice Single Answer
Question The ratio which indicates the protection available to the lenders of long term capital in the form of funds available to pay the interest charges is
Correct Answer Interest coverage ratio
Your Answer Debt Service coverage ratio


Match The Following
Question Correct Answer Your Answer

Operating Profit Contribution less Fixed Operating cost Contribution less Fixed Operating cost

Fixed cost remains constant remains constant

Variable cost varies in direct proportion to the sales revenue varies in direct proportion to the sales revenue

Contribution Sales less variable operating cost Sales less variable operating cost



Select The Blank
Question The economical use of the asset is permitted by the lessor on the payment of periodical amount which is in the form of ________.
Correct Answer Lease rent
Your Answer Lease rent


Multiple Choice Single Answer
Question The most reliable source of getting the information about the creditworthiness of the customer who is dealing with the company presently is
Correct Answer Past experience of the customer
Your Answer Bank Reference


Select The Blank
Question A liquid ratio of ________ is supposed to be standard
Correct Answer 1 : 1
Your Answer 1 : 1


True/False
Question Liquid liabilities includes all current liabilities except bills payable
Correct Answer False
Your Answer True


Multiple Choice Single Answer
Question The financing of the working capital requirement which arises during the course of normal business operations is termed as
Correct Answer Spontaneous sources
Your Answer Spontaneous sources


Multiple Choice Multiple Answer
Question Undue increase in Gross Profit ratio may indicate
Correct Answer Consideration of non-sales transactions as sales transaction , Over-valuation of closing stock
Your Answer Under-valuation of closing stock , Consideration of non-sales transactions as sales transaction


Multiple Choice Multiple Answer
Question The recommendations of the Chhore committee included
Correct Answer increasing role of short term loans and bill finance and curbing the role of cash credit limits , the bank should appraise and fix separate limits for normal non-peak levels and also peak levels
Your Answer increasing role of short term loans and bill finance and curbing the role of cash credit limits , the bank should appraise and fix separate limits for normal non-peak levels and also peak levels


True/False
Question In Regular Stock Dividend policy, the company may pay dividend in the form of bonus shares instead of cash
Correct Answer True
Your Answer True


Multiple Choice Multiple Answer
Question Advantages of Debentures from company's point of view are
Correct Answer The specific cost of debt capital represented by debentures is lower than the cost of preference or equity capital , Debenture financing does not result in dilution of control
Your Answer Debenture financing does not result in dilution of control , Carry voting rights


Select The Blank
Question The projects having Profitability index of more than ________ will be accepted
Correct Answer one
Your Answer one


Multiple Choice Multiple Answer
Question Internal sources of funds are
Correct Answer Funds from operations , Loss on sale of fixed assets , Goodwill written off
Your Answer Loss on sale of fixed assets , Funds from long term loans


Select The Blank
Question Subscription list of a public issue of shares shall be kept open for minimum ________ working days
Correct Answer 3
Your Answer 15


Select The Blank
Question Till the sales revenue reaches the break even point, the company ________
Correct Answer incurs the losses
Your Answer earns profit


Select The Blank
Question As per the Tandon Committee, the norms suggested for consumption of raw materials should be in ________
Correct Answer months
Your Answer quarterly


True/False
Question Proprietary ratios is the relationship between owners funds and total assets
Correct Answer True
Your Answer True


Multiple Choice Single Answer
Question The discounted cash inflows match with discounted cash outflows is known as
Correct Answer Internal Rate of return
Your Answer Internal Rate of return


Multiple Choice Multiple Answer
Question The characteristics of assets are
Correct Answer They are acquired for use for long periods , They are ordinarily not meant for resale
Your Answer They are acquired for use for long periods , They are ordinarily not meant for resale


Select The Blank
Question Investment of the venture capitalist does not exceed ________ so that the effective control of the project remains with the entrepreneur
Correct Answer 0.49
Your Answer 0.49


True/False
Question Under hypothecation mode of security neither the property not the possession of the goods hypothecated is transferred to the Bank
Correct Answer True
Your Answer True


Multiple Choice Single Answer
Question The mix of sources from which the long term funds required by a business are raised is termed as
Correct Answer Capital Structure
Your Answer Capital Budgeting


Multiple Choice Multiple Answer
Question Indicate which of these are Profitability ratios
Correct Answer Operating ratio , Gross Profit ratio
Your Answer Operating ratio , Gross Profit ratio


Match The Following
Question Correct Answer Your Answer

Financial ratios Ratios disclosing the financial position or solvency of the firm Ratios disclosing the financial position or solvency of the firm

Profitability ratio Ratios which reflect the final results of business operations Ratios which reflect the final results of business operations

Turnover ratios Ratios measuring the efficiency with which the assets are employed by a firm Ratios measuring the efficiency with which the assets are employed by a firm

Overall profitability ratio Ratios which indicates the percentage of return on the total capital employed in the business Ratios which indicates the percentage of return on the total capital employed in the business



Multiple Choice Single Answer
Question Current assets is in the form of
Correct Answer Receivables
Your Answer Land


True/False
Question Financial leverage is calculated as ( Sales - Variable cost ) / ( Earnings before Interest and tax - Interest )
Correct Answer False
Your Answer True