AIMA Online Assignments
Financial Management FM12
NOTE: The answers are boldly marked.
Question 1:- A financial ratio does the following:
a)
Relationship between different financial
statements of an organization.
b)
Compares different items
c)
A yardstick used by management to take
decisions
d) All of the above
Question 2:- ____________ standard of comparison indicates
the direction of change for a company over the past few years.
a)
Time series analysis
b)
Proforma analysis
c) Both of them
d)
None of the above
Question 3:- The ratios most useful for short-term creditors
are
a)
Leverage ratio
b)
Activity ratio
c) Liquidity ratio
d)
None of the above
Question 4:- When we are comparing the financial ratio's of
three it companies, we are said to be carrying out a ______________________________
analysis:
a)
Time series analysis
b)
Industry analysis
c)
Proforma analysis
d) None of the above
Question 5:- Fixed assets turnover ratio is a part of analyzing
the
a) Efficiency in utilizing assets
b)
Leverage of the company
c)
Liquidity of the company
d)
Studying the profitability of the company
Question 6:- ________________ ratio indicates the no. of
days a company can finance its business without receiving cash from outside
a)
Inventory ratio
b)
Interval measure
c)
Net working capital
d) Cash ratio
Question 7:- The following condition needs to be fulfilled
for a company to be considered having a strong financial position:
a)
A high debt-equity ratio
b)
Low proportion of shareholder equity
c) both the conditions are fulfilled
d)
none of them is true
Question 8:- The following companies would be able to face
adverse situations like recession favorably:
a)
A company with low operating expense ratio
b)
A company with low profit margin
c)
Both the conditions are favorable
d) None of the conditions are favorable
Question 9:- The following measures the market value of a
firms assets to its asset replacement cost:
a)
DuPont analysis
b) Tobin’s Q
c)
Book value to market value ratio
d)
Market value to book value ratio
Question 10:- The following it true of gross working capital
a)
It may be positive or negative
b)
Suggests the extent to which working capital
needs to be financed by the permanent sources of funds
c)
Both are correct
d) None are correct
Question 11:- Low levels of marketable securities are
maintained for financing working capital according to the ___________________ .
a)
Restrictive approach
b)
Flexible approach
c) Conservative approach
d)
Hedging approach
Question 12:- The asset side of a balance sheet flows in the
following order:
a)
Cash, Accounts receivables, inventory,
marketable securities, fixed assets.
b)
Cash, Accounts receivables, marketable
securities, inventory, fixed assets.
c)
Cash, marketable securities, Accounts
receivables, inventory, fixed assets.
d) Can be arranged in any order.
Question 13:- Accounts receivables are the same as:
a) Sundry debtors
b)
Bill receivables
c)
Trade creditor
d)
All mean the same
Question 14:- Accounts receivables management is based on
the following principal:
a) As liquidity increases the return decreases
b)
Cash is king
c)
Too much liquidity prevents bankruptcy
d)
All are true
Question 15:- Costs incurred in writing off accounts
receivables due to non-payment is called
a) Bad debt
b)
Bankruptcy cost
c)
Opportunity cost
d)
Collection cost
Question 16:- The credit term 5/10 net 60 signifies:
a) Credit period 10 days, cash discount 5%
cash discount period 60 days
b)
Credit period 60 days, cash discount 10% cash
discount period 5 days
c)
Credit period 60 days, cash discount 5% cash
discount period 10 days
d)
Credit period 5 days, cash discount 10% cash
discount period 60 days
Question 17:- Average collection period is:
a) Credit sales/Account receivables
b)
Account receivables/ Sales
c)
Receivables period/365
d)
365/Receivables period
Question 18:- The following statements are true as regards
inventory management:
a)
Maintaining huge amount of inventories requires
huge investments
b)
Efficient inventory management is necessary to
avoid unnecessary and inadequate investment
c)
Inventory management includes acquisition,
storage, disposal of materials
d) All are correct
Question 19:- Inventory term includes:
a)
Raw maw material + work-in-progress + finished
goods
b)
Raw maw material + work-in-progress + machine
spare parts
c) Raw maw material + work-in-progress +
Finished goods +machine spare parts
d)
Raw maw material + work-in-progress + Finished
goods +machine spare parts + tables + chairs
Question 20:- Holding inventory to take advantage of changes
in prices and getting quality discounts is regarded as the following motive:
a)
Transaction motive
b)
Speculative motive
c)
Precautionary motive
d) Financial motive
Question 21:- The insurance paid against fire and theft of
inventories is regarded as the following cost:
a)
Carrying cost
b)
Ordering cost
c)
Capital cost
d) Storage cost
Question 22:- The level of inventory at which the inventory
cost is minimum is regarded as:
a) Order point quantity
b)
Economic order quantity
c)
Re-order quantity
d)
None of the above
Question 23:- One of the oldest technique of inventory
control which is generally used to control "C" category inventories
is :
a)
ABC Analysis
b)
VED classification
c) Two-bin technique
d)
HML classification
Question 24:- Classifying inventory on the basis of their
availability is called:
a)
FSN classification
b)
HML classification
c)
VED classification
d) SDE classification
Question 25:- A fixed quantity of material is ordered
whenever the stock level reaches the re-order level in the:
a)
Fixed order periodic system
b)
Just in time system
c) Fixed order quantity system
d)
Order cycling system
Question 26:- A disbursement float is:
a) The amount not debited
b)
The amount not credited
c)
Firms available balance
d)
Firms book balance
Question 27:- The net float of cash management is positive
when:
a)
The firms disbursement float is more than the
collection float
b) The firms collection float is more than the
disbursement float
c)
Both the situations are correct
d)
None of the statements are correct
Question 28:- The bank already holds Rs. 5000. They write a
cheque of Rs. 1000 and deposit a cheque of Rs. 2000. What would be your net
float.
a) 6000
b)
-6000
c)
1000
d)
-1000
Question 29:- The total delay in case of collection float
includes:
a)
Mailing time + Processing time
b) Mailing time + Processing time+
availability time
c)
Mailing time + Availability time
d)
Availability time + processing time
Question 30:- ___________________ approach is use of more
short-term funds warranted by the matching plan.
a) Matching
b)
Conservative
c)
Aggressive
d)
None of the above
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