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WorksheetsMIDTERM IN FINANCIAL MANAGEMENT
Total questions: 50
Worksheet time: 24mins
What is the goal of strategic financial management?
To maximize the market value of a company and achieve planned objectives
To fluctuate the market value of a company and confuse planned objectives
To minimize the market value of a company and avoid planned objectives
To ignore the market value of a company and not achieve planned objectives
What is the process of evaluating the amount of money necessary and determining the competition known as?
Finance Functions
Financial Management
Financial Planning
Role of Financial Manager
What is the main function of a financial manager related to understanding capital markets?
Clear understanding of risks associated with trading stocks and debentures
Clear understanding of risks associated with investing in real estate
Clear understanding of risks associated with starting a new business
Clear understanding of risks associated with international trade
What is the importance of financial planning related to maintaining financial stability?
By keeping a fair balance between outflow and inflow of cash
By keeping a high outflow of cash and a low inflow of cash
By increasing the outflow of cash and decreasing the inflow of cash
By decreasing the outflow of cash and increasing the inflow of cash
What is the role of financial manager in relation to raising funds?
To ensure enough cash and liquidity to meet business obligations
To invest all funds in risky ventures
To avoid raising any funds for the business
To keep all funds in a savings account
What is the process of managing the finances of a company to meet its strategic goals known as?
Role of Financial Manager
Finance Functions
Financial Planning
Financial Strategy
What is the objective of financial planning related to determining capital requirements?
To consider both short-term and long-term capital requirements
To only consider short-term capital requirements
To only consider long-term capital requirements
To ignore capital requirements
What is the importance of financial planning related to the development of growth and expansion plans?
To aid in the development of growth and expansion plans
To hinder the development of growth and expansion plans
To ignore the development of growth and expansion plans
To delay the development of growth and expansion plans
What is the main function of a financial manager related to profit planning?
To ignore a company's profits
To waste a company's profits
To hide a company's profits
To ensure the proper use of a company's profits
What is the role of financial manager in relation to allocation of funds?
To allocate funds in such a manner that they are optimally used
To allocate funds randomly without any plan
To not allocate any funds
To allocate all funds to a single project
Risk management:
Helps identify and mitigate financial risks
Protects a company's assets
Reduces the company's exposure to risk
All of the above
Cash flow management:
Ensures adequate liquidity to meet short-term obligations
Manages working capital
Invests surplus funds effectively
All of the above
Which of the following is not a key aspect of financial management?
Financial planning and budgeting
Capital budgeting
Risk management
Financial analysis and reporting
Marketing
The primary goal of financial management is to:
Maximize shareholder wealth
Minimize costs
Increase sales
Improve efficiency
All of the above
The time value of money concept recognizes that:
Money today is worth more than the same amount in the future
Money in the future is worth more than the same amount today
The value of money is constant over time
The value of money is determined by inflation
None of the above
Financial ratios are used to:
Provide insights into a company's liquidity, profitability, efficiency, and solvency
Aid in decision-making and performance evaluation
Track a company's financial performance over time
All of the above
Financial markets are:
Places where financial instruments are bought and sold
Institutions that facilitate the buying and selling of financial instruments
Both of the above
Neither of the above
Financial analysis and reporting:
Provides insights into a company's financial health, performance, and profitability
Helps investors make informed investment decisions
Both of the above
Neither of the above
Financial management is essential for businesses because it:
Enables efficient allocation of resources and strategic decision-making
Enhances financial performance and profitability
Helps attract investors and secure external funding
Assists in managing financial risks and uncertainties
All of the above
The company uses this account when it reports sales of goods, generally under cost of goods sold in the income statement.
This means planning, organizing, directing and controlling the financial activities such as procurement and utilization of funds of the enterprise. It means applying general management principles to financial resources of the enterprise.
Capital structure
Investment
Financial Decision
Financial management
Is an ongoing process that will reduce your stress about money, support your current needs and help you build a nest egg for your long-term goals, like retirement. Financial planning is important because it allows you to make the most of your assets, and helps ensure you meet your future goals.
Budgeting
Financial Planning
Financing
Financial management
one of the three fundamental financial statements and is key to both financial modeling and accounting.
Management
Assets
Balance Sheet
Equity
Is a tool to help you record the flow of your company’s money and examine your financial condition.
Management System
Financial System
Accounting System
Financial Management System
This is the total amount of net income the company decides to keep.
Retained Income
Financial Income
Management Income
Shareholder equity
The most liquid of all assets, cash, appears on the first line of the balance sheet.
what did you call this?
Marketing sheet
Financial sheet
Financial marketing sheet
balance Sheet
According to International Accounting Standards(IAS 1) the objective of general purpose financial statements is to provide information about the financial position, financial performance, and cash flows of an entity that is useful to a wide range of users in making economic decisions.
True
False
A report of a company's financial worth in terms of book value. It is broken into three parts to include a company’s assets, liabilities, and shareholders' equity.
Balance Sheet
Income Statement
Cashflow Statement
Statement of Changes in Equity
Breaks down the revenue a company earns against the expenses involved in its business to provide a bottom line, net income profit or loss.
Balance Sheet
Income Statement
Cashflow Statement
Statement of Changes in Equity
Stockholders' equity refers to the assets remaining in a business once all liabilities have been settled.
True
False
A negative stockholders' equity may indicate an impending bankruptcy.
True
False
Provides an overview of the company's cash flows from operating activities, investing activities, and financing activities.
Cashflow Statement
Balance Sheet
Income Statement
Statement of Changes in Equity
Financial statement fraud is the manipulation of the information used to prepare the financial statements released to the public and financial institutions.
True
False
Financial statement analysis is the process of analyzing a company's financial statements for decision-making purposes.
True
False
A method of financial statement analysis in which each line item is listed as a percentage of a base figure within the statement.
Vertical Analysis
Horizontal Analysis
Ratio Analysis
Financial Benchmarking
A financial statement analysis method which compare historical data, such as ratios, or line items, over a number of accounting periods.
Vertical Analysis
Horizontal Analysis
Ratio Analysis
Financial Benchmarking
A ratio to determine the efficiency of managing assets in generating revenue.
Asset utilization ratio
Leverage ratio
Liquidity ratio
Profitability ratio
A ratio that measures the amount of debt that a company uses to buy more assets. An excessive ratio increases the risk of failure, since it becomes more difficult to repay debt.
Leverage Ratio
Liquidity Ratio
Profitability Ratio
Utilization Ratio
This ratio shows how well a company can convert its investment in assets into profits.
Liquidity Ratio
Asset Turn-over Ratio
Return on Asset
Profitability Ratio
Benchmarking is the continuous process of measuring products, services, and practices against the toughest competitors or those companies recognized as industry leaders
True
False
Profit or loss is defined as "the total of income less expenses, excluding the components of other comprehensive income".
True
False
Current assets are assets that are except:
expected to be realised in the entity's normal operating cycle
held primarily for the purpose of trading
expected to be realised within 12 months after the reporting period
cash and cash equivalents (restricted).
Current liabilities are those that are except:
expected to be settled within the entity's normal operating cycle
held for purpose of trading
due to be settled beyond 12 months
for which the entity does not have the right at the end of the reporting period to defer settlement beyond 12 months.
The line items to be included on the face of the statement of financial position are except:
property, plant and equipment
inventories
cash and cash equivalents
revenue
The following minimum line items must be presented in the profit or loss section except:
revenue
finance costs
tax expense
inventories
a. The notes must to financial statements present information about the basis of preparation of the financial statements and the specific accounting policies used
b. The notes disclose any information required by IFRSs that is not presented elsewhere in the financial statements and
c. The notes provide additional information that is not presented elsewhere in the financial statements but is relevant to an understanding of any of them
All statements are true
All statements are false
Only statement a is true
Only statement b is true
Several techniques are commonly used as part of financial statement analysis. Three of the most important techniques include horizontal analysis, vertical analysis, and ratio analysis.
True
False
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
