Hemwati Nandan Bahuguna Garhwal University 2005 M.Com Commerce FINANCIAL MANAGEMENT - Question Paper

1. explain briefly the nature and scope of Financial Management.Why is the wealth maximisation goal of Financial Management thought to be superior goal than the profit maximisation goal?
2. explain briefly the nature and scope of Financial Management.Why is the wealth maximisation goal of Financial Management thought to be superior goal than the profit maximisation goal?
3. What do you mean by optimal capital structure? What factor should be taken into consideration while evolving a balanced capital structure?
4. discuss the Gross and Net concept of working capital.Explain the sources of financing working capital requirements?
5. examine the utility of financial forecasting in business enterprises.How will you estimate the working capital requirements of a firm for the coming 2 years?
6. explain significance of Financial ratios as a tool of decision-making.Do these ratios have preditive power? elaborate the limitations of ratio analysis?
7. What is dividend policy? Examine the different factors determining the sound dividend policy of a company?
8. Write a short notes on any 2 of the following: (a) Concept of financial leverage (b) Management of Inventory (c) Financial ratios (d) Weighted avg. cost
9. a few people regard Retained Earnings as a source of capital without any cost,while other think that Retained Earnings do have a cost.What is your view,and why?
10. A company is considering 2 investment proposals,viz,proposal A and proposal B. assuming a requirement rate of return of 10% p.a, evaluate the investment proposals on the basis of: (a) Pay-back method (b) Discounted pay-back method (c) Net current value method (d) Profitability index method The other relevant particulars are as under: Proposal (A)/proposal (B)(in any): cost of Investment-200000/280000 Expected life(in years)-4/5 Net Income(after depreciation and tax)-nil/nil End of first yr-5000/nil End of second yr-20000/34000 End of third yr-35000/34000 End of fourth yr-25000/34000 End of fifth yr--/34000 Depriciation is to be given on the basis of straight line method,the current value of Re.1 to be received at the end of every year at 10%p.a.is provided. Year-1,2,3,4,5 current Value-0.909,0.826,0.751,0.683,0.621
11. From the subsequent Balance sheet of X Ltd,make out:(i) Statement of modifications in Working Capital (ii) Fund flow statement LIABILITIES: 1999/2000(in Rs): Equity Share capital-300000/400000 Redeemable Preference capital-150000/100000 General Reserve-40000/70000 Profit and Loss-300000/48000 Proposed Dividend-42000/50000 Creditors-55000/83000 Bills Payable-20000/16000 Provision for Taxation-40000/50000 ASSETS: 1999/2000(in Rs): Goodwill-115000/90000 Land and Building-200000/170000 Plant-80000/200000 Debtors-1600000/200000 Stock-77000/109000 Bills Receivable-20000/30000 Cash in hand-15000/10000 Cash at bank-6000/5000 Prepaid Expences-4000/3000 Additional Information: (i) Depreciation of Rs.10000 and Rs.20000 have been charged on plant and land & Buildings respectively in 2000. (ii) A dividend of Rs.20000 has been paid in the year 2000. (iii) Income Tax of Ts.35000 has been paid during the year 2000.

Earning:   Approval pending.