Financial Management

731. The balance sheet is alternately known as:

  1. Assets statement
  2. Statement of financial position
  3. Statement of profit and loss
  4. None of the given options
Correct answer: (B)
Statement of financial position

732. ______________ of a firm refers to the composition of its long -term funds and its capital structure:

  1. Capitalisation
  2. Over Capitalisation
  3. Under Capitalisation
  4. Market Capitalisation
Correct answer: (A)
Capitalisation

733. ______________ is the ability of a firm to earn a profit.

  1. Profitability
  2. Liquidity
  3. Efficiency
  4. Effectiveness
  5. Stability
Correct answer: (A)
Profitability

734. ______________ is how productively a firm utilizes its assets relative to its revenue and its profits.

  1. Efficiency
  2. Effectiveness
  3. Stability
  4. Liquidity
  5. Profitability
Correct answer: (A)
Efficiency

735. ______________ are itemized forecasts of a company's income, expenses, and capital needs and are also an important tool for financial planning and control.

  1. Profitability statements
  2. Budgets
  3. Owners' equity statements
  4. Statements of cash flows
Correct answer: (B)
Budgets

736. Ratio analysis allows a firm to compare its performance to:

  1. Other firms in the industry
  2. Other time periods within the firm
  3. Other industries
  4. None of the above
Correct answer: (A)
Other firms in the industry

737. Which of the following statement is considered as the accountant's snapshot of firm's accounting value as of a particular date?

  1. Income Statement
  2. Balance Sheet
  3. Cash Flow Statement
  4. Retained Earnings Statement
Correct answer: (B)
Balance Sheet

738. The ability of a firm to convert an asset to cash is called ______________.

  1. Liquidity
  2. Solvency
  3. Return
  4. Marketability
Correct answer: (A)
Liquidity

739. The ______________ is the percentage change in operating income that results from a percentage change in sales.

  1. Degree of financial leverage
  2. Breakeven point
  3. Degree of operating Leverage
  4. Degree of combined leverage
Correct answer: (C)
Degree of operating Leverage

740. The management of current assets is known as

  1. Current asset management
  2. working capital management
  3. Both a & b
  4. None
Correct answer: (C)
Both a & b
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