Financial Management

701. The most practical way to interpret or make sense of a firm's historical financial statements is through:

  1. Profit analysis
  2. Ratio analysis
  3. Estimate statement
  4. Forecast Hypothesis
  5. Assumption sheet
Correct answer: (B)
Ratio analysis

702. Finance is vital for which of the following business activity (activities) ?

  1. Marketing Research
  2. Product Pricing
  3. Design of marketing and distribution channels
  4. All of the given options
Correct answer: (D)
All of the given options

703. Maximising shareholders wealth means maximizing the

  1. Value of the firm's assets
  2. Amount of the firm's cash
  3. Value of the firm's investments
  4. Total market value of the firm's common stock
Correct answer: (D)
Total market value of the firm's common stock

704. Long-term financing plans with low liquidity have:

  1. High return and high risk
  2. Moderate return and Moderate risk
  3. Low return and low risk
  4. None of the above
Correct answer: (B)
Moderate return and Moderate risk

705. Which of the following is not a current asset

  1. Cash in hand
  2. Cash at bank
  3. Debtors
  4. Creditors
Correct answer: (D)
Creditors

706. The liability which should be paid within a period of one year is known as

  1. Current asset
  2. Current liability
  3. Fixed asset
  4. Variable asset
Correct answer: (B)
Current liability

707. The length or time period of the operating cycle of any firm can be defined as

  1. Operating cycle period
  2. Inventory conversion period
  3. Receivable conversion period
  4. None
Correct answer: (A)
Operating cycle period

708. Short term sources are

  1. Bank credit
  2. Public deposit
  3. Commercial papers
  4. All of the above
Correct answer: (D)
All of the above

709. ______________ management is the important task of the finance manager.

  1. Debt
  2. Equity
  3. Profit
  4. Cash
Correct answer: (D)
Cash

710. The fixed proportion of working capital should be generally financed from the ______________ capital sources.

  1. fixed
  2. variable
  3. semi-variable
  4. borrowed
Correct answer: (B)
variable
Page 71 of 78