Business Studies 1 Marks Question

Rizul Bhattacharya after leaving his job wanted to start a Private Limited Company with his son. His son was keen that the company may start manufacturing of Mobile- phones with some unique features. Rizul Bhattacharya felt that the mobile phones are prone to quick obsolescence and a heavy fixed capital investment would be required regularly in this business. Therefore he convinced his son to start a furniture business.
Identify the factors affecting fixed capital requirements which made Rizul Bhattacharya to choose furniture business over mobile phones.

What is meant by ‘Financial Risk’?

What is meant by ‘Capital Structure’?

Name and state the aspect of financial management that enables foresee the fund requirements both in terms of 'the quantum' and 'the timings'.

How does 'cost of equity' affect the choice of capital structure of a company? Explain.

'Bharat Express' specialises in Courier Services. Its 'wide range of express package and parcel services' help business firms to make sure that the goods are made available to the customers at the right place and at the right time.
State, with reason, whether the working capital requirements of 'Bharat Express' will be high or low.

Define Financial Management.

Name any two essential ingredients of sound working capital management.

Identify the decision taken in financial management which affects the liquidity as well as the profitability of business.

State, why the working capital needs for a 'Service-industry', are different from that of a Manufacturing industry.

‘Best Bulbs Pvt. Ltd. was manufacturing good quality LED bulbs and catering to local market. The current production of the company is 800 bulbs a day. Sumit, the marketing manager of the company surveyed the market and decided to supply the bulbs to five-star-hotels also. He anticipated the higher demand in future and decided to buy a sophisticated machine to further improve the quality and quantity of the bulbs produced.
Identify the factor affecting fixed capital requirements of the company.

What is meant by ‘Trading on Equity’?

Name and state the aspect of financial management that provides a link between investment and financing decisions.

Radhika and Vani who are young fashion designers left their job with a famous fashion designer chain to set-up a company fashionable Pvt. Ltd.' They decided to run a boutique during the day and coaching classes for entrance examination of National Institute of Fashion Designing in the evening. For the coaching Center, they hired the first floor of a nearby building. Their major expense was money spent on photocopying of notes for their students. They thought of buying a photocopier knowing fully that their scale of operations was not sufficient to make full use of the photocopier.

In the basement of the building of 'Fashionate Pvt. Ltd.' Praveen and Ramesh were carrying on a printing and stationery business in the name of ‘Neo Prints Pvt. Ltd.' Radhika approached Praveen with the proposal to buy a photocopier jointly which could be used by both of them without making separate investment, Praveen agreed to this.

Identify the factor affecting fixed capital requirements of 'Fashionate Pvt. Ltd.'

The size of assets, the profitability and competitiveness, are affected by one of the financial decisions. Name and state the decision.

'Indian Logistics' has its own warehousing arrangements at key locations across the country. Its warehousing services help business firms to reduce their overheads, increase efficiency and cut down distribution time.State with reason, whether the working capital requirements of 'Indian Logistics' will be high or low?

Explain how 'cost of debt' affects the choice of capital structure of a company?

How does ‘Inflation’ affect the working capital requirements of a company? State.

What is meant by ‘financial management’?

Define ‘Capital Structure’.

What is the primary objective of 'Financial Management'?

State how ‘Growth Prospects’ affect the working capital requirements of a company?

''Cost of debt is lower than the cost of equity Share capital''. Give reason why even then a company cannot work only with debt.

Name the financial decision which will help the businessman in opening a new branch of its business.

A company wants to establish a new unit in which machinery worth Rs.10 lakhs is involved. Identify the type of decision involved in financial management.

Name the concept which increases the return on equity shares with a change in the capital structure of the company.

What is meant by ‘Capital Structure’ in financial management?

An investor wanted to invest ₹. 20,000 in Treasury Bills for a period of 91 days. When he approached the Reserve Bank of India for this purpose he came to know that it was not possible.
Identify the reason why the investor could not invest in the Treasury Bill.

In the paint industry, various raw materials are mixed in different proportions with petroleum for manufacturing different kinds of paints. One specific raw material is not readily and regularly available to the paint manufacturing companies. Bonler Paints Company is also facing this problem and because of this there is a time lag between placing the order and the actual receipt of the material. But, once it receives the raw materials, it takes less time in converting it into finished goods.
Identify the factor affecting the working capital requirements of this industry.

What should a company issue, shares or debentures, if it does not want to loose control over the management of the company?

In what kind of situation does favourable financial leverage occurs?

Why is working capital needed? Give one reason.

What is business finance?

Name the financial decision which will help a businessman in opening a new branch of its business.
OR
A company wants to establish a new unit in which a machinery of worth ₹ 10 lakhs is involved. Identify the type of decision involved in financial management.

Why is working capital needed? Give any one reason.

State two factors affecting financing decisions.

It refers to investment in long-term assets. Mention this type of capital.

Define fixed assets.

It refers to investment in long-term assets. Mention this type of capital.

Name the concept which increases the return on equity shares with a change in the capital structure of a company.

A company wants to open a new branch of its business in a new area. For this, investment of ₹ 25 lakhs is involved. Identify the type of decision involved in financial management.

What is business cycle?

Fixed assets should never be financed through short term sources. Do you agree?

What is floatation cost?

'How much of the profit earned by company is to be distributed to the shareholders and how much of it should be retained in the business for meeting the investment requirements'- Which financial decision considers this?

If stock markets are bullish, then what would be more easy for the company to issue?

Name the concept which increases the return on equity shares with a change in the capital structure of a company.

Identify the decision taken in financial management which affects the liquidity as well as the profitability of business.

What is an important determinant of company's ability of trading on equity?

What does higher business risk indicate?