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Financial Management

Question

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Ankit adopted a new policy in his business: Purchase computer on credit and sell them for cash. Will it affect the requirement of working capital?

Solution

Yes, it will reduce the need for working capital as there are no debtors due to cash sales and there is less investment in inventory due to credit availed.

Some More Questions From Financial Management Chapter

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.

Identify the financial decision which determines the amount of profit earned to be distributed and to be retained in the business. Explain any four factors affecting this decision.

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