Financial Management Set 3
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This set of Financial Management Multiple Choice Questions & Answers (MCQs) focuses on Financial Management Set 3
Q1 | The appropriate objective of an enterprise is;
- Maximisation of sale
- Maximisation of owners wealth.
- Maximisation of profits.
- None of these.
Q2 | The job of a finance manager is confined to
- Raising funds
- Management of cash
- Raising of funds and their effective utilization.
- None of these.
Q3 | Financial decision involve;
- Investment ,financing and dividend decision
- Investment ,financing and sales decision
- Financing , dividend and cash decision
- None of these.
Q4 | Net Profit Ratio Signifies:
- Operational Profitability
- Liquidity Position
- Solvency
- Profit
Q5 | Working Capital Turnover measures the relationship of Working Capital with:
- Fixed Assets
- Sales
- Purchases
- Stock.
Q6 | Dividend Payout Ratio is:
- PAT Capital
- DPS ÷ EPS
- Pref. Dividend ÷ PAT
- Pref. Dividend ÷ Equity Dividend
Q7 | Inventory Turnover measures the relationship of inventory with:
- Average Sales
- Cost of Goods Sold
- Total Purchases
- Total Assets
Q8 | The term 'EVA' is used for:
- Extra Value Analysis
- Economic Value Added
- Expected Value Analysis
- Engineering Value Analysis
Q9 | Return on Investment may be improved by:
- Increasing Turnover
- Reducing Expenses
- Increasing Capital Utilization
- All of the above
Q10 | In Current Ratio, Current Assets are compared with:
- Current Profit
- Current Liabilities
- Fixed Assets
- Equity Share Capital
Q11 | There is deterioration in the management of working capital of XYZ Ltd. What does itrefer to?
- That the Capital Employed has reduced,
- That the Profitability has gone up,
- That debtors collection period has increased,
- That Sales has decreased.
Q12 | Debt to Total Assets Ratio can be improved by:
- Borrowing More
- Issue of Debentures
- Issue of Equity Shares
- Redemption of Debt.
Q13 | Ratio of Net Income to Number of Equity Shares known as:
- Price Earnings Ratio
- Net Profit Ratio,
- Earnings per Share
- Dividend per Share.
Q14 | A Current Ratio of Less than One means:
- Current Liabilities < Current Assets
- Fixed Assets > Current Assets
- Current Assets < Current Liabilities
- Share Capital > Current Assets
Q15 | A firm has Capital of 10,00,000; Sales of 5,00,000; Gross Profit of . 2,00,000 andExpenses of . 1,00,000. What is the Net Profit Ratio?
- 20%
- 50%
- 10%
- 40%
Q16 | Suppliers and Creditors of a firm are interested in
- Profitability Position
- Liquidity Position
- Market Share Position
- Debt Position
Q17 | Which of the following is a measure of Debt Service capacity of a firm?
- Current Ratio
- Acid Test Ratio
- Interest Coverage Ratio
- Debtors Turnover
Q18 | Gross Profit Ratio for a firm remains same but the Net Profit Ratio is decreasing. Thereason for such behavior could be:
- Increase in Costs of Goods Sold
- If Increase in Expense
- Increase in Dividend
- Decrease in Sales.
Q19 | Which of the following statements is correct?
- A Higher Receivable Turnover is not desirable,
- Interest Coverage Ratio depends upon Tax Rate,
- Increase in Net Profit Ratio means increase in Sales,
- Lower Debt-Equity Ratio means lower Financial Risk.
Q20 | Debt to Total Assets of a firm is .2. The Debt to Equity boo would be:
- 0.80
- 0.25
- 1.00
- 0.75
Q21 | Which of the following helps analysing return to equity Shareholders?
- Return on Assets
- Earnings Per Share
- Net Profit Ratio
- Return on Investment.
Q22 | In Inventory Turnover calculation, what is taken in the numerator?
- Sales
- Cost of Goods Sold,
- Opening Stock
- Closing Stock.
Q23 | Financial Planning deals with:
- Preparation of Financial Statements
- Planning for a Capital Issue
- Preparing Budgets
- All of the above
Q24 | Financial planning starts with the preparation of:
- Master Budget
- Cash Budget
- Balance Sheet
- None of the above.
Q25 | Process of Financial Planning ends with:
- Preparation of Projected Statements
- Preparation of Actual Statements
- Comparison of Actual with Projected
- Ordering the employees that projected figures m come true.