Related InterviewSolutions

• Delta Cables Ltd. earned a net profit of Rs. 50 crores. Atul, the finance manager of Delta Cables Ltd. , wants to decide how to appropriate these profits. Which financial decision will help him in deciding it?
• 'A business that doesn't grow dies', says Mr. Shah, the owner of Shah Marble Ltd. with glorious 36 months of its grand success having a capital of Rs.80 crore. Within a short span of time, the company could generate cash flow which not only covered fixed cash payment obligations but also create sufficient buffer. The company is on the growth path and a new breed of consumers is eager to buy the Italian marble sold by Shah Marble Ltd. To meet the increasing demand, Mr. Shah decided to expand his business by acquiring a mine. This required an investment of Rs.120 crore. To seek advice in this matter, he called his financial advisor Mr. Seth who adivsed him about the judicious mix of equity (40%) and Debt (60%). Mr. Seth also suggested him to take loan from a financial institution as the cost of raising funds from financial institutions is low. Though this will increase the financial risk but will also raise the return to equity shareholders. He also apprised him that issue of debt will not dilute the control of equity shareholders. At the same time, the interest on loan is a tax deductible expense for computation of tax liability. After due deliberations with Mr. Seth, Mr. Shah decided to raise funds from a financial institution.(a) Identify and explain the concept of Financial Management as advised by Mr. Seth in the above situation. (b) State the four factors affecting the concept as identified in part 'a' above which have been discussed between Mr. Shah and Mr. Seth.
• Read the following text and answer the following questions on the basis of the same: Mr. A. Bose is running a successful business. Mr. Bose is the owner of R. K. Cement Ltd. Mr. Bose decided to expand his business by acquiring a Steel Factory. This required an investment of Rs. 60 crores. To seek advice in this matter, he called his financial advisor Mr. T. Ghosh who advised him about the judicious mix of equity (40%) and Debt (60%). Employ more of cheaper debt may enhance the EPS. Mr. Ghosh also suggested him to take loan from a financial institution as the cost of raising funds from financial institutions is low. Though this will increase the financial risk but will also raise the return to equity shareholders. He also apprised him that issue of debt will not dilute the control of equity shareholders. At the same time, the interest on loan is a tax deductible expense for computation of tax liability. After due deliberations with Mr. Ghosh, Mr. Bose decided to raise funds from a financial institution.1. Identify the concept of Financial Management as advised by Mr. Ghosh in the above situation. (A) Capital Budgeting (B) Capital Structure (C) Dividend Decision (D) Working Capital Decision2. In the above case Mr. Ghosh suggested to raised more fund from debt. Higher debt-equity ratio results in: (A) Lower financial risk (B) Higher degree of operating risk (C) Higher degree of financial risk (D) Higher Earning of profit.3. “Mr. T. Ghosh who advised him about the judicious mix of equity (40%) and Debt (60%)” The proportion of debt in the overall capital is called......... (A) Working Capital (B) Financial Leverage (C) Total Assets (D) None of these4. Employ more of cheaper debt may enhance the EPS. Such practice is called: (A) Equity Trading (B) Financial Leverage (C) Investment Decision (D) Trading on Equity
• Which are the approaches adopted by financial management to achieve maximum economic welfare of the owner?
• "Financial management strives to achieve an objective." Name the objective and explain the way this objective is achieved.
• What do you understand by the term “Planning” and give its importance?
• “Issue of shares and debentures play a very important role in long term credit.” What are they? How do they help?
• What is meant by Gross Working Capital?
• Distinguish between : Gross working capital and net working capital.
• Which of the following statements is not true with reference to the concept of net working capital?(A) Excess of current assets over current liabilities(B) Does not show the liquidity position of the company(C) Provides proper measurement for working capital(D) Increase in current liability does not increase net working capital