Basic Understanding (Financial Management)

Financial Management is mainly concerned with ______________.

• All aspects of acquiring and utilizing financial resources for firms activities

• Arrangement of funds

• Efficient Management of every business

• Profit maximization

The primary goal of the financial management is ____________.

• to maximize the return

• to minimize the risk

• to maximize the wealth of owners

• to maximize profit

In his traditional role the finance manager is responsible for ___________.

• proper utilisation of funds

• arrangement of financial resources

• acquiring capital assets of the organization

• efficient management of capital

Financial leverage measures ____________.

• sensitivity of EBIT with respect of % change with respect to output

• % variation in the level of production

• sensitivity of EPS with respect to % change in level of EBIT

• no change with EBIT and EPS

Operating leverage measures ______

• Financial Risk

• Business Risk

• Production Risk

• Market Risk

Financial leverage helps one to estimate ____________.

• Business Risk

• Financial Risk

• Production Risk

• Business and financial risk

. Traditional approach confines finance function only to _________ funds

• raising

• mobilizing

• utilizing

• financing

Operating leverage x financial leverage= _____.

• Combined Leverage

• Financial Combined Leverage

• Operating Combined Leverage

• Fixed leverage

Cost of retained earnings is equal to _______.

• Cost of equity

• Cost of debt

• Cost of bank loan

• Cost of term loans

The company's cost of capital is called ________.

• Leverage

• Hurdle rate

• Risk rate

• Return rate