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WorksheetsFINANCIAL MANAGEMENT
Total questions: 40
Worksheet time: 14mins
The primary goal of financial management is
to maximize the return
to minimize the risk
to maximize wealth of owners
to maximize profit
Market value of shares are decided by
the respective companies
the investment market
the government
the shareholders
Capital budgeting related to
long term assets
short term assets
long term assets and short term assets
fixed assets
Market value of shares are decided by
the respective companies
the investment market
the government
the shareholders
1. Investment can be defined.
Person’s dedication to purchasing a house or flat
Use of capital on assets to receive returns
Usage of money on a production process of products and services
Net additions made to the nation’s capital stocks
Dividend decision is concerned with
only distribution of dividend to shareholders
how much to be retained in business
how much profit earned is distributed to shareholders and how much to be retained in the business
none of the above
Financial management aims at
ensuring availability of enough funds
reducing the cost of funds procured
effective deployment of funds
all of the above
A long term investment decision is called
working capital decision
capital budgeting decision
financial decision
dividend decision
Plans made for a period of one year or less are known as---------
(a)
The inability of a business to meet its fixed financial obligations, like payment of interest, is known as
Business risk
Financial risk
Long-term risk
Market risk
The overall financial risk depends upon the
Proportion of debt in the total capital
Proportion of equity in the total capital
Both of the above
None of the above
Which of the following sources of capital should not be selected by a business if its fixed cost is high?
Equity shares
Preference shares
Debentures
All of the above
When the stock market index is rising, a company may issue ___________ in order to meet its financial requirements.
Debentures
Bonds
Equity shares
None of the above
Under which of the following circumstances a company is NOT likely to declare a higher dividend?
When the earnings of the company are high
When a company has a lucrative forthcoming business opportunity(Growth opportunity )
When the cash flow position of the company is strong
None of the above
A company is likely to declare higher dividends if
Tax rates are high
Tax rates are relatively lower
Tax rate has no effect on dividend declaration
None of the above
It is essentially the preparation of a financial blueprint of an organisation’s future operations.
Identify the related concept.
Financial management
Financial planning
Capital budgeting decisions
Dividend decision
Common size analysis is also known as————–Analysis
Vertical
Horizontal
Parallel
None
An Annual Report is issued by a company to its:
Directors
Shareholders
Auditors
Management
Which analysis is considered as dynamic :
Horizontal Analysis
Vertical Analysis
Internal Analysis
External Analysis
Which analysis is considered as static :
Horizontal Analysis
Vertical Analysis
Internal Analysis
External Analysis
Which analysis is based only on one year’s data :
Cash Flow Statement
Dividend Analysis
Vertical Analysis
Horizontal Analysis
Analysis of Financial Statements is significant:
For Creditors
For Managers
For Employees
For all of the above
Financial analysis becomes significant because it :
Ignores price level changes
Measures the efficiency of business
Lacks qualitative analysis
Is effected by personal bias
When bad position of the business is tried to be depicted as good, it is known as
Personal Bias
Price Level Changes
Window Dressing
All of the Above
limitation of analysis of financial statements is
Affected by window dressing
Difficulty in forecasting
Do not reflect changes in price level
All of the Above
___________________ represents the short-term liabilities that a business owes to creditors.
Owner's equity
Accounting equation
Accounts payable
Financial statement
The ___________________ is a report of the revenue, expenses, and net income or net loss over an accounting period.
income statement
accounts payable
owner's equity
financial statement
The systematic process of recording and reporting the financial position of a person or an organization is called, ______________.
Accounts receivable
Accounting
Generally accepted accounting principals (GAAP)
Fixed assets
Owner's equity is the owner's claim to the asset of the business. It is NEVER referred to as the owner's capital in the business.
True
False
A ___________________ is a plan specifying how money will be used or spent during a particular period.
financial forecast
financial plan
accounting equation
budget
A _______________________ is an estimate of a business's financial outlook for the few years.
financial plan
financial forecast
budget
income statement
The _______________________ is a financial report that shows incoming and outgoing money during an accounting period (often a month, quarter, or year).
financial forecast
financial plan
statement of cash flows
income statement
Jackson spends in gas changes every month, based upon the price of gas, this is an example of which of the following:
Fixed Expense
Variable Expense
Periodic Expense
Which of the following is one step in financial planning for a budget?
Use percentages to see how much of the total income should be set aside for each expense
Create a spending chart
Create a table for cash gifts and gift cards your received
If Jonathan wants to save 20% of his income, how much money does he need save per month if he make $1,600 per month.
$400
$160
$320
$200
Which financial institution usually has the highest interest rates on loans?
credit unions
payday loans
commercial banks
Jackie is ready to reconcile her bank statement with her check register. What should she do?
Subtract deposits made since the statement.
Add outstanding checks made since the statement.
Add outstanding deposits and subtract outstanding checks written since statement.
She does not need to reconcile her bank statements.
Financial Management refers to the planning, monitoring, organising & controlling of the monetary resources of a business.
True
False
Which of the following is an example of a non-current liability?
Bank overdraft
Accounts payable
A bank loan of $500,000
Interest payable
The term liquidity is the degree in which a business can turn its assets into cash
True
False
