Business Studies

Financial Management

Question:

What is meant by capital structure?

Answer:

Capital structure refers to the mix between owners and borrowed funds. It represents the proportion of equity and debt
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Financial Management

Q 1.

Explain factors affecting the dividend decision.

Q 2.

Discuss the two objectives of Financial Planning.

Q 3.

What are the factors which will affect the capital structure of this company?

Q 4.

Explain the importance of having a financial plan for this company. Give an imaginary plan to support your answer.

Q 5.

Discuss about working capital affecting both the liquidity as well as profitability of a business.

Q 6.

‘S’ Limited is manqufacturing steel at its plant in India. It is enjoying a buoyant demand for its products as economic growth is about 7%-8% and the demand for steel is growing. It is planning to set up a new steel plant to cash on the increased demand it is facing. It is estimated that it will require about ? 5,000 crores to set up and about t 500 crores of working capital to start the new plant.

 What is the role and objectives of financial management for this company?

Q 7.

What is the main objective of financial management? Explain briefly.

Q 8.

What is meant by capital structure?

Q 9.

Define a ‘current assets’ and give four examples.

Q 10.

Capital structure decision is essentially optimisation of risk-return relationship. Comment.

Q 11.

Financial management is based on three broad financial decisions. What are these?

Q 12.

Keeping in mind that it is a highly capital intensive sector what factors will affect the fixed and working capital. Give reasons with regard to both in support of your answer.

Q 13.

What is ‘financial risk? Why does it arise?

Q 14.

What is meant by working capital? How is it calculated?
Discuss five important determinants of working capital requirements.

Q 15.

A capital budgeting decision is capable of changing the financial fortune of a business. Do you agree? Why or why not?

Q 16.

Explain the term ‘trading on equity’. Why, when and how it can used by a business organisation?