Working Capital Management Set 1
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This set of Working Capital Management Multiple Choice Questions & Answers (MCQs) focuses on Working Capital Management Set 1
Q1 | What are the aspects of working capital management?
- inventory management
- receivable management
- cash management
- all of the above
Q2 | _________ function includes a firm’s attempts to balance cash inflows andoutflows.
- finance
- liquidity
- investment
- dividend
Q3 | Firms which are capital intensive rely on _________.
- equity
- short term debt
- debt
- retained earnings
Q4 | Hirer is entitled to claim ___________.
- depreciation
- salvage value
- hp payments
- none of above
Q5 | Which of the following is not an advantages of trade credit?
- easy availability
- flexibility
- informality
- buyout financing
Q6 | Which of the following are theories for dividend relevance?
- walter’s model
- mm approach
- game theory
- market value theory
Q7 | What is not a form of dividend?
- cash dividends
- bonus shares(stock dividend)
- share split
- split reverse
Q8 | The percentage of earnings paid as dividends is called __________.
- dividend policy
- payout ration
- cash dividends
- reverse split
Q9 | What are the various methods of estimating cash?
- receipts and payment method
- adjusted profit & loss method
- balance sheet method
- all of the above
Q10 | The art of managing, within the acceptable level of risk, the consolidatedfunds optimally and profitably is called _________.
- integrated treasury
- treasury management
- merchant banking
- none of the above
Q11 | What are the different types of underlying assets?
- stocks
- bonds
- currency
- stock indices
Q12 | What are people who buy or sell in the market to make profits called?
- hedgers
- speculators
- arbitrageurs
- none of the above
Q13 | Which of the following is a technique that helps the exporter to sell thereceivables to any bank or financial institution without recourse?
- forfeiting
- leading & lagging
- derivatives
- netting
Q14 | Money market financial services not include:
- bill discounting
- merchant banking
- leasing
- securitisation
Q15 | Factoring involves:
- providing short term loan
- providing long term loan
- financing of export receivables
- management of receivables of borrower
Q16 | The tools of treasury management does not include:
- foreign exchange management
- cash management
- receivable management
- risk management
Q17 | Under which type of bank borrowing can a borrower obtain credit from abank against its bills?
- letter of credit
- cash
- purchase or discounting of bills
- working capital loan
Q18 | The factors that affect dividend policy are:
- tax consideration
- privatisation
- foreign investment
- working cash flow
Q19 | To financial analysts, "working capital" means the same thing as __________.
- total assets
- fixed assets
- current assets
- current assets minus current liabilities.
Q20 | Which of the following would be consistent with an aggressive approach tofinancing working capital?
- financing short-term needs with short-term funds.
- financing permanent inventory buildup with long-term debt.
- financing seasonal needs with short-term funds.
- financing some long-term needs with short-term funds.
Q21 | Which of the following would be consistent with a conservative approach tofinancing working capital?
- financing short-term needs with short-term funds.
- financing short-term needs with long-term debt.
- financing seasonal needs with short-term funds.
- financing some long-term needs with short-term funds.
Q22 | -Which of the following would be consistent with a hedging (maturity matching)approach to financing working capital?
- financing short-term needs with short-term funds.
- financing short-term needs with long-term debt.
- financing seasonal needs with long-term funds.
- financing some long-term needs with short-term funds.
Q23 | Which of the following statements is most correct?
- for small companies, long-term debt is the principal source of external financing.
- current assets of the typical manufacturing firm account for over half of its total assets.
- strict adherence to the maturity matching approach to financing would call for all current assets to be financed solely with current liabilities.
- similar to the capital structure management, working capital management requires the financial manager to make a decision and not address the issue again for several months
Q24 | The amount of current assets that varies with seasonal requirements isreferred to as __________ working capital.
- permanent
- net
- temporary
- gross
Q25 | Having defined working capital as current assets, it can be further classifiedaccording to __________.
- financing method and time
- rate of return and financing method
- time and rate of return
- components and time