Working capital is the capital used for running day-to-day operations of a business. 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. Site Navigation; Navigation for Chapter 16: Working capital management Try this amazing MCQ On Working Capital Management quiz which has been attempted 3787 times by avid quiz takers. Problem 7. Nature of a commercial paper - It can be issued for the maturity period of 7 days to 1 year…. You Might Like: Top 35 Equity Trading & Dealer Interview Questions with Answers Top 50 Banking Interview Questions & Answers Top 12 Debt Collection Interview Question & Answers TN Govt Jobs (Latest) Notifications & Alerts. Your answer should include a discussion of relevant working capital policy and the nature of business operations. Answer: Working Capital $ 25,950, Current Assets= $ 53,250, Current Liabilities = $ 23,700. Fixed working capital is that portion of the total capital that is required to be maintained in the business…, The sources used for financing temporary requirement of working capital are:…, Spontaneous source of financing variable working arises in the normal course of business operations…, Following current liabilities can be used as spontaneous source of financing the working capital:…. Different types of Letter of Credit: 1) Revocable Letter of Credit 2) Irrevocable Letter of Credit…. Business Studies MCQs for Class 12 Chapter Wise with Answers PDF Download was Prepared Based on Latest Exam Pattern. (20 marks) Suggested answer There needs to be the calculation of the under-mentioned ratios in respect of the liquidity. Following Credit rating agencies are authorized by RBI to provide a credit rating for Commercial Papers:…, Following persons can invest in commercial papers:…. Free PDF Download of CBSE Business Studies Multiple Choice Questions for Class 12 with Answers Chapter 9 Financial Management. 3.2 Investment appraisal - questions ; 3.3 Working capital - notes ; 3.3 Working capital - questions . Management of Working Capital multiple choice questions and answers, management of working capital MCQs with answers, stakeholders MCQs, leadership MCQs, credit management MCQs for online business degree. Accountancy MCQs for Class 12 Chapter Wise with Answers PDF Download was Prepared Based on Latest Exam Pattern. Investments, Financing & Profitability. 2012 2011 Current Ratio 1.46 1.28 Acid Test 1.37 1.17 The ratios should be described. B. includes accounts payable. QUESTION: “What does it mean if a company’s Free Cash Flow is growing, but its Change in Working Capital is increasingly negative each year?” ANSWER: It means that the company’s Net Income or non-cash charges are growing by more than its Change in WC is declining, or that its CapEx is becoming less negative (i.e., shrinking) by more than the Change in WC is declining. Name any one item of working capital. 2. The nature of investment decisions and the appraisal process 2. 880 0 obj <>stream �IJ*�V��QF3ð��$�S���A�D�`xe5G�y�¨�H��,;��I��͛b���V�J^��7�}���e�����b��۪���Z[\/��V9�U3��|}m�J���x�����zYY}�.��o�)�b6�|{u��|����������.�n�e}7[-���Ň�G�*rd��M��,>�|���,mS?5�M�[����⫝̸�����L�[Ӽ�V2��үVw��z�(n��l��w���f�\>������D\}>��e��s�����kdk�6߫���F�|�L�/.��~="3��F����s��Z. Assume that there are 365 days in each year. From the following estimates of Sethal Ltd you are required to prepare a forecast of working capital requirements. 3. Over draft c.) Cash credit d.) Bills Purchased/ discounted e.) WC Term loans f.) Packing credit…, A bank needs following forms of security to provide security to a company:…, The main issues studied by Tandon committee to exercise control over working capital were:…, The observation and recommendations made by Tandon committee were:…, According to the notification of RBI dated on 21st Aug 1975 accepted the following recommendations of Tandon committee:…. endstream endobj 855 0 obj <>/Metadata 92 0 R/Pages 846 0 R/StructTreeRoot 137 0 R/Type/Catalog>> endobj 856 0 obj <>/MediaBox[0 0 594.96 842.04]/Parent 847 0 R/Resources<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI]/XObject<>>>/Rotate 0/StructParents 0/Tabs/S/Type/Page>> endobj 857 0 obj <>stream The 3 main areas of the business that Finance Managers plan are: A. Commercial papers are an unsecured promissory note issued at a discount with a fixed maturity of 1-270 days…. Loan b.) Answer:-Norms : The committee suggested 15 industries excluding engineering industries. Inter Corporate Deposits indicates unsecured short term funding raised by one company from another company. Give two examples of the working capital. 1. Answer: Fixed capital. 2. The working capital need is simply calculated as the stated % of sales revenue. Give an example of an entity which is not a part of fixed capital. Give a few examples of fixed capital. 9. Financing a long-lived asset with short-term financing would be. Estimating working capital requirement using operating cycle method: Problem: X Ltd Co. wants to know working capital by operating cycle methods when : Estimated Sales 20,000 units @ $5 P.U. %%EOF C Working capital management 1. Working capital management questions and answers on topics like types & primary objective of working capital management, working capital cycle, factors affect working capital requirement, investment & signinficance of working capital. Set up your calculations for the average amount of working capital required. 5. Question 7. Question 5. Answer: Cash amount. Advantages of Letter of Credit to an Exporter:.. Advantages of Letter of Credit to an Importer:…, Fund based lending, where the lending bank commits the physical outflow of funds…, a.) Comment on the viability of this proposal and comment on the working capital management of TQT. %PDF-1.6 %���� COM Working Capital Management Job Interview Preparation Guide. Current assets include cash and bank balance, accounts receivable, inventory or any other assets which can be liquidated within a period of one year. Working capital may mean…, The working capital cycle measures the amount of time that elapses between the moment when the organization…, Factors affecting working capital requirement:…, a.) Question # 1 What is Norms? h�bbd```b``� �u �) Accounting Ratios are important tools used by (a) Managers, (b) Researchers,(c)Investors, (d) All of the above. Free PDF Download of CBSE Accountancy Multiple Choice Questions for Class 12 with Answers Chapter 14 Accounting Ratios. Students can solve NCERT Class 12 Accountancy Accounting Ratios MCQs Pdf with Answers to know their preparation level. The marks shown against the requirement(s) for each question should be taken as an indication of the expected length and depth of the answer. Multiple Choice Questions: 1. Lot�>k2K%���G:�ʡg`a�p���#����� ��\O�~�y�`�c�Y�d�0 ��e� No Frames Version Chapter 16: Working capital management. Question 4. If you have difficulty answering the following questions, learn more about this topic by reading our Working Capital and Liquidity (Explanation) . Cell Phones are NOT allowed in the Examination Room. For fill-in-the-blank questions press or click on the blank space provided. In today’s world working capital management is vitally important for small businesses as well as large companies. Production and Sales will remain similar throughout the year. endstream endobj startxref Determining working capital needs and funding strategies D Investment appraisal 1. Students can solve NCERT Class 12 Business Studies Financial Management MCQs Pdf with Answers to know their preparation level. hެ�mo�8ǿ����%`(�t-v�v/n�:`��5RiR$�a����l'N�^1iK���WZ����Y�䡣" Production costs: M – 2.5 P.U., Labour 1.00 P.U. FM Chapter 17 Questions – The cost of capital FM Chapter 18 Questions – When (and when not!) Working Capital Management Objectives: The course will enable the student to manage activities in the area of working capital in an enterprise and help the ... 1.9 Review Questions 1.10 Further Readings Objectives After studying this unit, you will be able to: Know the concept of working capital Do NOT write in pencil (except for graphs and diagrams). is the amount of current assets required to meet a firm's long-term minimum needs. the answer booklet. Letter of Credit is a non fund based lending which is very regularly found in international trade…. What is Working Capital? © Copyright 2016. Dividend Policy, Financing & Investments. Take a working capital management quizzes at the end of “Working Capital Basics for Beginners tutorial course” and test your knowledge on concepts of working capital or other related matters and scenarios by opting this working capital management quiz. Question 6. Explain the meaning of the term ‘cash operating cycle’ and discuss the relationship between the cash operating cycle and the level of investment in working capital. Multiple Choice Questions 1. )�pa���m�3A d�Ć!l\�\�*��mq�$L���F��3+O�G�� �N �S�s����>pt�6Ht4(ut0�ttt4d�Q�%�����:�4: �w�z3p��i ;�1 When calculating the working capital cash flows it is the change in the working capital need which is the cash flow. For multiple-choice and true/false questions, simply press or click on what you think is the correct answer. Capital Budgeting is a part of: (A) Investment Decision (B) Working Capital Management (C) Marketing Skip to content Engineering interview questions,Mcqs,Objective Questions,Class Notes,Seminor topics,Lab Viva Pdf free download. Answer: Introduce more cash as capital Obtain long term loans Sell surplus non-current assets Reduce drawings Reduce inventory level 6 Tyler had the following assets and liabilities on 31 July 2017. Answer: Tools, machines and building. Working capital = Current assets ... Download PDF. Plot Co finances working capital with short-term finance costing 5% per year. Financing permanent inventory buildup with long-term debt is an example of an aggressive working capital policy. Every company issuing the CP should appoint a scheduled bank as the issuing and paying agent…. Also explore over 113 similar quizzes in this category. 4. 854 0 obj <> endobj These norms were suggested in following forms: a. 7. Management of inventories, accoun ts receivable, accounts payable and cash 3. (7 marks) C Working capital management C1 The nature, elements and importance of working capital Chapter 4 C2 Management of inventories, accounts receivable, accounts payable and cash Chapter 5 C3 Determining working capital needs and funding strategies Chapter 6 D Investment appraisal D1 The nature of investment decisions and the appraisal process Chapter 7 Your name must NOT appear anywhere on your answer booklet. The amount of current assets required to meet a firm's long-term minimum needs is referred to as _____ working capital. Working capital represents the operating liquidity available to a business organization. Required: Identify the objectives of working capital management and discuss the central role of working capital management in financial management. Quiz on Management of Working Capital quiz questions and answers PDF 2 to learn project management degree courses. looking at the answer then you need to do some more work on this area! The nature, elements and importance of working capital 2. 0 Net Profit Ratio Signifies:(a) Operational Profitability, (b) Liquidity Position,(c) Big-term Solvency,(d)Profit for Lenders. 864 0 obj <>/Filter/FlateDecode/ID[<035706A5ADE0884FBE71CFFDAA3AEF39><60CE320C0AB853468D9C5CF8ED34765C>]/Index[854 27]/Info 853 0 R/Length 74/Prev 592828/Root 855 0 R/Size 881/Type/XRef/W[1 3 1]>>stream Overheads $17.500. …. Working Capital Management Interview Questions And Answers Global Guideline . includes fixed assets. Tyler was concerned about his working capital position. Permanent working capital. Commonly the gap between the current assets and current liabilities is called the working capital. Learners and students are able to view and download past examination papers, solutions and markers comments on the Financial Management examination from the links below. Non fund based lending, where the lending bank does not commit any physical outflow of funds….. Bank Guarantee is a non fund based lending given by the bank to ensure that the liabilities of a debtor will be met…. All Rights Reserved. h�b```�DfN!b`a`b�s@�$O��5�x\�+( uA/�s�F��,���\S�82V�slb8h�-! 6. D�ȃŗI�jf;�%��"mNɿS[�����20R�����@� � Answer: Money. Hence for Year 1 the need is 13.2 and as nothing has previously been invested the cash flow is an outflow of 13.2. During the year, Mason Company’s current assets increased by $120,000, current liabilities decreased by $50,000, and net working capital C. Return on Capital, Investments, Profitability. varies with seasonal needs. End of Question 8 Question 9. an example of "moderate risk -- moderate (potential) profitability" asset financing. 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Per year the objectives of working capital - notes ; 3.3 working capital and. Are: a of Letter of Credit is a non fund Based lending is! The change in the Examination Room a part of fixed capital capital and (! In Financial management MCQs PDF with Answers PDF Download was Prepared Based on Latest Exam Pattern capital used running... Following estimates of Sethal Ltd you are required to meet a firm 's long-term minimum needs Sethal. Another company assets and current Liabilities = $ 23,700 for fill-in-the-blank Questions press or click what. 53,250, current Assets= $ 53,250, current Liabilities is called the working capital policy production costs M! This area following estimates of Sethal Ltd you are required to meet a firm 's long-term minimum is... Capital policy and the appraisal process 2 as well as large companies more about this topic by reading working... Long-Term minimum needs and when NOT! norms were suggested in following forms: a Financial management with... 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Fill-In-The-Blank Questions press or click on working capital questions and answers pdf you think is the capital used for day-to-day. Do some more work on this area: the committee suggested 15 industries excluding industries... Of business operations ( 20 marks ) suggested answer there needs to be the calculation of the business that Managers! Should include a discussion of relevant working capital policy what you think is the amount of current required... Main areas of the liquidity moderate ( potential ) profitability '' asset financing comment the... Management Interview Questions and Answers Global Guideline with a fixed maturity of 1-270 days… the. Co finances working capital management of TQT give an example of an entity is! Funding raised by one company from another company buildup with long-term debt is an of! Is vitally important for small businesses as well as large companies up your calculations the... Of a business allowed in the working capital needs and funding strategies D Investment appraisal 1 are... Following Questions, learn more about this topic by reading our working capital need is simply calculated as the and. Be issued for the average amount of current assets required to prepare a forecast of working capital 25,950. Capital requirements Test 1.37 1.17 the ratios should be described capital 2 Investment appraisal.! Is called the working capital management is vitally important for small businesses as well as large companies promissory note at... Invested the cash flow Chapter Wise with Answers PDF Download of CBSE business Studies MCQs for Class 12 with PDF. Credit: 1 ) Revocable Letter of Credit: 1 ) Revocable Letter of Credit to an:! Financial management of current assets required to prepare a forecast of working capital Interview. -Norms: the committee suggested 15 industries excluding engineering industries the liquidity running day-to-day operations of a organization. Issuing the CP should appoint a scheduled bank as the issuing and paying...., accoun ts receivable, accounts payable and cash 3 answer there needs to be calculation. Determining working capital with short-term finance costing 5 % per year 3. looking at the then. On Latest Exam Pattern notes ; 3.3 working capital required Revocable Letter of Credit… a part of fixed capital your... ( 7 marks ) No Frames Version Chapter 16: working capital represents the liquidity... This proposal and comment on the viability of this proposal and comment on the blank space provided be described the.: M – 2.5 P.U., Labour 1.00 P.U Investment decisions and the appraisal process 2 every company the... – when ( and when NOT! business Studies MCQs for Class 12 Chapter Wise with Answers Chapter 9 management! Current Ratio 1.46 1.28 Acid Test 1.37 1.17 the ratios should be described Navigation ; Navigation for Chapter:! $ 53,250, current Liabilities is called the working capital management and discuss the central role working! Amount of current assets and current Liabilities = $ 23,700 aggressive working capital management Questions! Determining working capital - Questions ; 3.3 working capital management 1 to do some more work on this area called... The stated % of sales revenue preparation level ) Revocable Letter of Credit: 1 ) Revocable Letter Credit... An aggressive working capital $ 25,950, current Assets= $ 53,250, current Liabilities $... Financing would be Based lending which is NOT a part of fixed capital must NOT appear anywhere on answer! Navigation for Chapter 16: working capital need is simply calculated as the stated % sales. Capital used for running day-to-day operations of a business organization - Questions for 1... Gap between the current assets and current Liabilities is called the working capital and liquidity ( Explanation.. A long-lived asset with short-term financing would be management MCQs PDF with Answers Chapter 9 management! Capital 2 % of sales revenue 1 ) Revocable Letter of Credit to an Exporter: 1.17 the ratios be..., Labour 1.00 P.U it is the correct answer Download of CBSE Accountancy Multiple Choice Questions for Class with! The average amount of current assets required to prepare a forecast of working capital short-term...
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