12th Class Business Studies Financial Management Question Bank

done Financial Management (Short) Total Questions - 44

• question_answer1)
  What is meant by capital structure?
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• question_answer2)
  Discuss the two objectives of financial planning.                                                        [Delhi, AI, Foreign 2009]
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• question_answer3)
  What is 'Financial Risk'? Why does it arise?
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• question_answer4)
  Define 'Current Assets' and its some four examples.
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• question_answer5)

  Financial management is based on three broad financial decisions. What are these?

  Or

  What is meant by 'financial management'? Explain any three decisions involved in financial management.

  [AI 2007; Delhi 2008C]

  Or

  Every manager has to take three major decisions while performing the finance function Explain them.

  [CBSE Sample Paper 2011]

  Or

  Enumerate any three important decisions taken in financial management.                   [AI 2001C]

  Or

  What is meant by financial management? State any two financial decisions taken by a financial manager.                                                                                                                                                                 [Delhi, Foreign 2009]

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• question_answer6)

  What is the main objectives of financial management? Briefly explain.

  Or

  Explain the term ‘Financial Management’. Briefly explain any three of its objectives.                    [Delhi 2007]

  Or

  What is meant by 'Financial Management'? State the primary objective of Financial Management.    [Delhi 2012]

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• question_answer7)
  How does working capital affect both the liquidity as well as profitability of a business?
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• question_answer8)
  VERY SHORT ANSWER TYPE QUESTIONS                                             (1 MARK EACH) Define financial management.                                                                   [CBSE 2017, 2011; AI 2010, 2011]
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• question_answer9)
  What is the primary objective of 'financial management’                                                                  [Delhi 2013] Or State the objective of financial management.                                                                                         [Foreign 2011]
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• question_answer10)
  Name the financial decision which affects the liquidity as well as profitability of a business.                                                                                                                         [Foreign 2010, Delhi 2008]
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• question_answer11)
  Name the financial decision which will help a businessman in opening a new branch of its business.      [Delhi 2010]
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• question_answer12)
  A company wants to establish a new unit in which a machinery of worth ` 10 lakhs is involved. Identify the type of decision involved in financial management.                                                                       [Delhi 2008; HOTS]
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• question_answer13)
  Name any two essential ingredients of sound working capital management.                               [AI Foreign 2010]
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• question_answer14)

  Name the type of investment decision which relates to short-term and affects day to day operations of a company.                                                                                 [CBSE Sample Paper 2011]

  Or

  Identity the decision taken in financial management which affects the liquidity as well as the profitability of business.

  [AI 2008; HOTS]

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• question_answer15)
  Delta Cables Ltd. earned a net profit of ` 50 crores. Atul, the finance manager of Delta Cables Ltd., wants to decide how to appropriate these profits. Which financial decision will help him in deciding it?          [Foreign 2008; HOTS]
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• question_answer16)
  How can taxation policy be a factor affecting dividend decision?                                                             [HOTS]
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• question_answer17)
  If companies have easy access to the capital market, what decision regarding paying dividends should be taken?                                                                                                                                                       [HOTS]
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• question_answer18)
  'How much of the profit earned by company is to be distributed to the shareholders and how much of it should be retained in the business for meeting the investment requirements' - Which financial decision considers this?  [HOTS]
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• question_answer19)
  What is meant by financial planning?                                                                                 [AI, Foreign 2006]
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• question_answer20)
  What is meant by 'Capital Structure'?                                                                                                           [AI 2017]
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• question_answer21)
  When is financial leverage favourable?                                                                  [CBSE Sample Paper 2017]
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• question_answer22)
  Name the concept which increases the return on equity shares with a change in the capital structure of a company.                                                                                                                                                                                                                                                 [Delhi 2014]
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• question_answer23)
  "Cost of debt" is lower than the cost of "Equity share capital". Give reason why even then a company cannot work only with the debt.                                                                                                       [Delhi, AI, Foreign 2010]
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• question_answer24)
  Name the concept which increases the return on equity shares with a change in the capital structure of a company.                                                                                                                                                                 [Delhi 2008; HOTS]
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• question_answer25)
  "Both debt and equity have equal amount of risk." Comment.
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• question_answer26)
  "EPS always rises with increase in debt." Comment.
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• question_answer27)
  Which component of capital structure determines the overall financial risk in an organisation?        [Delhi Comptt. 2009]
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• question_answer28)
  What does a high Debt Service Coverage Ratio indicate?                                   [CBSE Sample Paper 2017-18]
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• question_answer29)
  Identify why the requirements of Fixed Capital for a trading concern are different from that of a manufacturing organisation.                                                                                                                      [Foreign 2008; HOTS]
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• question_answer30)
  It refers to investment in long-term assets. Mention this type of capital.                                                     [HOTS]
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• question_answer31)
  State why the working capital needs for a “Service industry” are different from that of a Manufacturing industry.                                                                                                                                                                                                         [Al 2008; HOTS]
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• question_answer32)
  Due to the festive season, a company manufacturing gift items plans to open some more stores in the city. Will it affect the requirement for working capital?
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• question_answer33)
  Sagar purchases goods on 2 month credit and sells the goods on 3 months credit. How much working capital is needed?
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• question_answer34)
  Rahul adopted a new policy in his business: Purchase mobile phones on credit and sell them for cash. Will it affect the requirement of working capital?
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• question_answer35)
  There is a boom in the demand for Apple i Phone 6. Does it affect the requirement of working capital for company manufacturing Apple i Phone 6?                                                                                                      [HOT'S]
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• question_answer36)
  A company needs special kind of raw material which is imported from Japan and time gap between order placement and delivery is 3 months. How does it affect the requirement for working capital?                                                        [HOT'S]
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• question_answer37)
  SHORT ANSWER TYPE QUESTIONS                                                  (3-4 MARKS EACH) Sound financial management is the key to prosperity of business.                                               [All India 2009]
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• question_answer38)

  What is meant by 'Financing Decision'? State any four factors affecting the financing Decision.

  [Delhi 2010, Al 2010]

  Or

  Explain the following as factors affecting financing decision:

  (i) Cost                             (ii) Cash flow position of business

  (iii) Level of fixed operating cost and

  (iv) Control considerations                                                                        [Delhi 2012]

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• question_answer39)
  Tata International Ltd. earned a net profit of ` 50 crores. Ankit, the finance manager of Tata International Ltd. wants to decide how to appropriate these profits. Discuss any five factors which will help him in taking this decision.                                                                                                                        [CBSE Sample Paper 2015]
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• question_answer40)
  Which process prepares a blue print of an organisation's future preparations relating to finance? Give any two reasons why this process is needed?                                                                                  [CBSE Sample Paper 2011]
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• question_answer41)

  To avoid the problem of shortage and surplus of funds/what is required in financial management? Name the concept and explain its three points of importance.                          [AI 2008 (I)]

  Or

  Name the process which helps in determining the objectives, policies, procedures, programmes and budgets to deal with the financial activities of an enterprise. Explain its three points of importance.  [Delhi 2008]

  Or

  Explain any four points that highlight the importance of financial planning.                                  [Delhi 2014]

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• question_answer42)
  Explain briefly any four factors which affect the choice of capital structure of a company.                   [Delhi 2017]
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• question_answer43)
  Explain briefly any four factors that affect the working capital requirement of a company.                   [Delhi 2017]
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• question_answer44)
  Explain briefly any four factors that affect the fixed capital requirements of a company.                      [Delhi 2017]
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