Financial Management Business Studies - Financial Management

What is related to debt

Retained earnings are affected by

Stock market condition is a factor related to

Gross working capital refers to:

What is the cost of raising funds called?

When is financial leverage favourable?

How do rising prices affect the requirement of working capital of an organisation?

Avik is the finance manager of Mars Ltd. In the current year, the company earned high profit. However, Avik thinks that it is better to declare smaller dividend as he is unsure about the earning potential of the company in the coming years.Avik's choice of dividend decision is based on which of the factor that affect it?

Give two factors affecting investment decision.

Tata International Ltd. earned a net profit of ₹ 50 crores. Ankit, the finance manager of Tata International Ltd. wants to decide how to appropriate these profits. Identify the decision that Ankit will have to take and also discuss any five factors which help him in taking this decision.

PVR is a renowned multiplex operators in India. It owns 254 screens in 52 properties at 24 locations in the country. Considering the fact that there is more growing trend among the people to spend more of their disposable income on entertainment, company planned to add more screen at existing locations and start at new locations also; they also plan to add food chain also at their locations. The company planned to float equity shares in market to raise the desired capital. The issue was fully subscribed and paid. Over the years the sale and the profit of the company have increased tremendously and it has been declaring higher dividend and the market price of its share has increased manifolds. (a) Name the different kinds of financial decisions taken by PVR Ltd. by quoting lines from para. (b) Do you think the financial management team of the company has been able to achieve its prime objectives? Why or why not?

Healthcare Ltd. is a company engaged in production of organic food. Presently it sells its products through indirect channels of distribution. The company is planning to start its own show rooms and online portals. The financial manager suggested to use debt to invest in own showrooms and online portals.
Company plans to raise debt capital of 40 lakhs through a loan from ICICI bank at 10% Interest.
The present capital base of the company is 9 lakhs equity shares of 10 each. The rate of tax is
30%.
In the context of above case -
Assuming expected rate of return same as current year, i.e., 15%, do you think the decision to use debt is justified.
Show your working clearly.

If firm has long operating and production cycle, it will require_________ working capital.

If firm has liberal credit policy, it will require_________working capital.

Manufacturer requires________ working capital.

Service providers require_______ working capital.

Positive leverage effect is for________ equity shareholders.

If debt service coverage ratio is high then company can have more debt

A company employs more of debt securities in its capital structure if company is sure of generating enough cash inflows.

Capital structure means the portion of current assets and current liabilities.

If a company follows labour intensive technique in production, they will go for less requirement of fixed capital.

Investment in current assets for longer duration is called fixed capital

You are the finance manager of a company. The board of directors has asked you to determine the working capital requirement for the company. State the factors that you would take in consideration while determining the requirement of working capital for the company.

How do loan components or debentures in the capital structure act as lever to raise the return on equity share capital?

There are three important decisions which an organisation has to take in respect of financial management. Enumerate and explain in brief these three decisions.

A sound financial plan is the key to success of sound financial management of the company. Discuss.