Financial Planning

Unit- 2

FINANCIAL PLANNING PART 1 (1 marks ques.) Q1 …………………… of a company must have both long- range and short- range financial plans. (A) (B) (C) (D)

Finance manager CEO MD None of these

Q2 A financial plan has to consider……………. ,…………………… , …………………………. . (A) (B) (C) (D)

Capital structure Cash flow Capital expenditure All of above

Q3 Composition of debt and equity, keeping in view the risk profile of the existing business, new business to be taken up and the Dynamics of capital market conditions. This features indicate by……………… (A) (B) (C) (D)

Expense method Percent of sales method or constant ratio method Financial plan A and B

Q4 How many benefits that accrue to a firm out of the financial planning ? (A) 6 (B) 3 (C) 5 (D) 4 Q5 Ultimately the productivity of assets is enhance it’s show which of the following benefit? (A) (B)

(C) (D)

Flexibility in capital structure Formulation of police Integration of long range plans or short range plans None of these

Q6 ……………… is managed by a plan that ensures flow of cash at least cost. (A) (B) (C) (D)

Long term Shortage Neither first nor second I and II both

Q7 ……………. is given adequate consideration.

(A) (B) (C) (D)

Flexibility in capital structure Effective utilization of funds Formulation of policies Either II or III

Q8 ………………refers to the ratio of capital employed to sales generated. (A) (B) (C) (D)

Operating capital Flexibility in capital Fixed asset Annual reports

PART 2 (2 marks ques.) Q9 How many steps involved in financial planning? (A) (B) (C)

7 9 8

(D) 6 Q10 …………………objectives could be grouped into qualitative and quantitative. (A) (B) (C) (D)

Corporate Cost theory Earning theory Overcapitalization

Q11 There are ………………..methods of preparing income statement. (A) (B) (C) (D)

2 4 5 None of these

Q12 Which approach or method based on the assumptions? (A) (B) (C) (D)

Percent of sale method Expense method Combination of both these two II and III

Q13 EFR = A (∆S) _ L (∆S) _ ms(1-d)-( ∆1m + SR) this formula is given by………. S S (A) (B) (C) (D)

Prof. Prasanna Chandra Michael C Ehrharte Enqence. F Brighaom Either II or III

Q14 Control mechanism is developed for………………..and their effective use.

(A) (B) (C) (D)

Allocation of funds Capitalization Cost theory Earning theory

Q15 How many factors are affected on the financial planning? (A) (B) (C) (D)

8 7 6 9

Q16 Where we must consider about capital intensive or labour intensive industry? (A) (B) (C) (D)

Nature of the industry Flexibility Size of company Government policy

PART 3 (4 marks ques.) Q17 A well established company enjoying a good market share, for its products normally commands…………… (A) (B) (C) (D)

Investors confidence Capital of investors Debt & Equity II and III

Q18 Even with expertise, management of successful firms could not arrive at the optimum capital composition in terms of the….. (A)

(B) (C) (D)

Quantum, Sources Debt, Equity Qualitative, Quantitative None of these

Q19 ……………..of a firm refers the composition of its long-term funds. (A) (B) (C)

Over capitalized Under capitalized Capitalization

(D)

Cost theory

Q20 Earning theory involves………..steps. (A) (B) (C) (D)

2 3 4 5

Q21 A company is consider to be ……………. when its actual capitalization is lower than its proper capitalization as warranted by its earning theory.

(A) (B) (C) (D)

Under capitalization Capitalization Over capitalization None of these