Monday, March 1, 2010

mba-financial management

P.K.R. Arts College for Women, Gobi.
Department of Management Studies
I-MBA - Financial Management-Question Bank.

UNIT – 1
1. What are the sources of long term finance?
2. Explain the components of Indian Financial System.
3. What are the regulations of SEBI regarding public issues?
4. What are the functions of modern finance manager?
5. How the objective of profit Maximisation is achieved by Finance Managers?
6. What is the regulatory framework governing the Indian Financial System?
7. Define the scope of financial management. What are the basic financial decisions?
8. Briefly explain the role of financial management in the organization.
9. Briefly explain the role of SEBI in capital issues.
10.Describe the major components involved in profit maximization.
11.State the role SEBI in capital issues.
12.What are the SEBI guidelines relating to issue of shares by existing companies?
13. Explain the wealth maximization concept in financial management.
14. Explain the features of any one innovative instrument of long term finance.
15. What are the functions of SEBI?
16. Explain the changing role of the finance manager in a firm.
17. Critically evaluate the capital market development in the recent few years.
18. What are the basic financial decisions? How do they involve risk-return trade-off?
19. Discuss the problems of a Finance Manager in the Management of finance functions in the Indian
20. ”The profit maximization is not an operationally feasible criterion.” Do you agree? Illustrate your
21. Explain the legal framework associated with financial management.
22. Why is analysis of risk-return relationship important in finance decision? Explain risk and return in
relation to inventory decision.
23. Explain the guidelines of SEBI for capital issue.
24. Explain the objectives and functions of financial management.
25. Discuss the features of capital market development in India.
26. Briefly explain what is meant by the risk-return trade-off?


1. What are the areas of conflicts in capital budgeting between NPV and IRR?
2. “The average accounting rate of return fails to give weight to the later cash flows”-Comment on the statement.
3. Explain the nature and concept of capital budgeting.
4. What is meant by IRR?
5. How will you incorporate risk in capital budgeting?
6. Under what circumstances is profitability index superior to NPV? Give an example.
7. How in IRR different from ROI? Give a example.
8. What is meant by capital rationing? Give a example.
9. What is Capital budgeting? Why is it significant?
10. Despite its weaknesses, the payback period method is popular in practice. What are the reasons for its popularity?
11. What are the factors to be considered in capital budgeting decision?
12. What is capital rationing? Why and how it is practiced?
13. Explain the various methods of capital budgeting.
14. What are the merits and demerits of Internal rate of return method?
15. Explain the principal stages involved in the investment appraisal process.


1. How will you calculate the cost of equity capital?
2. How leverage concepts are used in Financial Management?
3. What is an EBIT and EPS analysis?
4. What is the relevance of cost of capital in the corporate investment and financing decisions?
5. What are the different types of leverages?
6. Explain how cost of capital is to be computed for retained earnings.
7. Define cost of capital. Explain its significance in financial decision making.
8. Does financial leverage always increase the earnings per share? Illustrate your answer.
9. What is meant by the concept ‘finance risk’? What is the relationship between leverage and the
cost of capital?
10. Does financial leverage always increase earnings per share? Illustrate your answer.
11. Explain the importance of weighted average cost of capital.
12. Define cost of capital and state importance.
13. Explain the Net operating income approach to capital structure.
14. What are the limitations of using the WACC as a discount rate in investment appraisal?


1. What are the assumptions used on NI approach?
2. What are the different types of dividend policy?
3. Explain net operating income of capital structure theories.
4. Discuss the CAPM theory with its assumptions.
5. Explain NOI approach of capital structure theory.
6. ”The M-M approach is based on unrealistic assumptions”-Evaluate the reality of the assumptions
made by M-M.
7. Explain the nature of the factors which influence the dividend of a firm.
8. What do you understand by Capital structure of a corporation? Discuss the qualities which a sound
capital structure should possess.
9. Explain the assumptions of Net operation income approach.
10. Discuss the guiding principles of capital structure decisions.
11.Explain the factors that determine the capital structure of a firm.
12.Why should a company aim at a balance capital structure?
13.Explain how the Net income approach different from the Net Operating income approach to capital
14. Under what circumstances will issue bonus shares be a better alternative to declaring dividend?
15. What are the assumptions which underline Gardon’s model of dividend effect? Does dividend
policy affect the value of the firm under Gardon’s model?
16. Is there an ideal capital structure? If so, how do firms achieve it?
17.How does dividend policy affect share valuation?
18.Critivcally examine the MM theory on capital structure. What are the assumptions behind this


1 Draw an operating cycle of working capital for a manufacturing firm.
2. What are the major recommendations of Tandon Committee?
3. What are the factors that determine the working capital of a paper mill?
4. Explain the modern inventory control techniques.
5. Explain the steps involved in investing in inventories. Illustrate with an example.
6. Explain the concept of “working capital flow”, giving examples of transactions that affect working
capital and that do not affect working capital.
7. What are the components of working capital
8. Explain the motives for holding cash.
9. Explain how working capital management policies affect the profitability, liquidity and structural
10. Explain the liquidity profitability trade off in reivables.
11. What is a cash budget? How is it useful for Cash Management?
12. What factors are to be considered which evolving the accounts management policy.
13. Explain the procedure of estimating the working capital requirements of a car manufacturer.
14. Explain the concept pf “working capital flow”, giving examples of transactions that affect working
capital and that do not affect working capital.
15. ”The main objective of inventory management is to minimise cash outlays for inventories” –
16. What methods do you suggest for estimating working capital needs? Illustrate your answer.
17. How should working capital and sunk cost be treated in analyzing investment opportunities
Explain with suitable examples.
18. Explain requirements for effective liquidity management.
19. What are the advantages of a stable dividing policy?
20. Explain the importance of inventory management.
21. Explain how you forecast the working capital needs for a firm.
22. What do you understand by the term working capital?
23. How can outsourcing contribute to effective working capital management?

1 comment:

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