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Financial Management

Question
CBSEENBS12004263
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Length of production cycle affects the working capital requirements of an organisation. Explain, how ?

Solution

By production cycle is meant the time involved in converting raw material into finished product. Longer this period, more will be the time for which the capital remain blocked in raw material and semi-manufactured products. Thus, more working capital will be needed. On the contrary, where period of production cycle is little, less working capital will be needed.

Some More Questions From Financial Management Chapter

What is meant by Financial Management?

Every manager has to take three major decisions while performing the finance function. Explain them.

Explain any six factors affecting the financing decision of a company.

Explain any six factors affecting the dividend decision of a company.

What is meant by Dividend decision? State any four factors affecting the Dividend decision.

What is meant by Financing decision? State any four factors affecting the financing decision.

 

Explain briefly the factors affecting the investment decision.

Explain, in brief, any five factors that should be taken into consideration while determining the long-term dividend policy.

Or

Explain factors affecting the dividend policy of a company.

“Determining the relative proportion of various types of funds depends upon various factors”. Explain any five such factors.

Or

“Determining the overall cost of capital and the financial risk of the enterprise depends upon various factors”. Explain any five such factors.

Investment decision can be long-term or short-term. Explain long-term investment decision and state any two factors affecting this decision.

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