AIMA Online Assignment Financial Management FM12

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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