Financial Management Question Bank 2013 – Shreya Classes


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Concepts

  • Distinguished between permanent and temporary working capital?
  • What is business risk?
  • Explain Inter-corporate Deposits?
  • What are liquidity ratios and what is their significance?
  • Why is cost of debt normally less than the cost of equity? Is it always so?
  • What is meant by letter of credit?
  • State in brief any three functions of Finance Manager.
  • What is the difference between hypothecation and pledge?
  • What is the meaning and significance of Weighted Average Cost of Capital?
  • What is cash operating cycle?
  • What is conservative Approach concept?
  • What is Margin of safety
  • Cost of Debt
  • Trading on Equity
  • Profit Maximization.
  • Float
  • Non-diversable Risk
  • Financial Leverage
  • What are motives of holding cash?
  • Explain the concept of conservatism
  • What is Miller and Modigliani Approach?
  • What is meant by profitability index of a project?
  • What do you understand by precautionary cash holdings?
  • Financial Breakeven point
  • What is meant by purchase consideration in case of business restructuring?
  • What is meant by De-Merger in business restructuring?
  • What is meant by ploughing back of profits?

 

 

 

 

Long Questions (10 Marks each)

  • Explain the methods of measuring Cost of Debt Capital and Cost of Equity Capital with illustrations.
  • Explain the steps involved in Credit Analysis in detail.
  • What are the motives for holding cash?
  • What is the meaning of the following terms? Commercial papers. and Bill discounting.
  • What are the factors that determine working capital requirements?
  • Explain the concept of working capital. How is working capital affected by (a) sales, (b) technology and manufacturing policy, and (c) price level changes?
  • Ratio analysis is only a technique for making judgments and not a substitute for it. Comment.
  • Discuss various cash management models.
  • Discuss in brief the factors influencing Working Capital Requirements.
  • Explain in brief the sources of Long Term Finance and Short Term Finance.
  • Explain the importance of Leverage. Distinguish between Operating Leverage & Financial Leverage
  • What is Lease Finance? Distinguish between Finance Lease and Operating Lease.
  • Discuss the scope and significance of Finance Function.
  • “Financial management is more than procurement of funds”. What do you think are the responsibilities of a finance manager?

 


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