# MBA/MBA Financial Management MCQ Set 11 Sample Test,Sample questions

## Question: `"Share holder wealth" in a firm is represented by:`

1.The number of people employed in the firm

2.The book value of the firm's assets less the book value of its liabilities

3.The amount of salary paid to its employees

4.The market price per share of the firm's common stock

## Question: `A company's ______________ is money owned to it by its customers.`

1.Liquidity

2.Accounts Receivable

3.Accounts Payable

4.Inventory

## Question: `A Current Ratio of Less than One means:`

1.Current Liabilities < Current Assets

2.Fixed Assets > Current Assets

3.Current Assets < Current Liabilities

4.Share Capital > Current Assets

## Question: `A very high current ratio indicates`

1.High efficiency

2.flabby inventory

3.position of more long term funds

4.b or c

## Question: `A very high current ratio indicates`

1.High efficiency

2.flabby inventory

3.position of more long term funds

4.b or c

## Question: `Accounting Ratios are important tools used by`

1.Managers

2.Researchers

3.Investors

4.All of the above

## Question: `An asset is a`

1.Source of fund

2.Use of fund

3.Inflow of funds

4.none of the above

1.Nil

2.Rs.2.50 lac

3.(-) Rs.50,000

4.Rs.1 lac

## Question: `Capital Budgeting is related to`

1.Long term assets

2.Short term assets

3.Long term and short term assets

4.Fixed assets

## Question: `Current ratio of a concern is 1,its net working capital will be`

1.Positive

2.Negative

3.Nil

4.None of the above

## Question: `Current ratio of a concern is 1,its net working capital will be`

1.Positive

2.Negative

3.Nil

4.None of the above

1.0.80

2.0.25

3.1.00

4.0.75

## Question: `Dividend Payout Ratio is:`

1.PAT Capital

2.DPS ÷ EPS

3.Pref. Dividend ÷ PAT

4.Pref. Dividend ÷ Equity Dividend

## Question: `Excess working capital results in`

1.Block of cash

2.Loosing interests

3.Lack of production

4.Lack of smooth flow of production

1.payable

2.receivables

3.borrowings

4.debts

## Question: `Financial Management is mainly concerned with ______________.`

1.arrangement of funds

2.all aspects of acquiring and utilizing financial resources for firm's activities

4.profit maximization

## Question: `Financing activities involve`

1.lending money

2.acquiring investments

3.issuing debt

4.acquiring long-lived assets

## Question: `If a company issues bonus shares the debt equity ratio will`

1.Remain unaffected

2.Will be affected

3.Will improve

4.none of the above

## Question: `In calculating cash flows from operating activities using the indirect method, a loss on the sale of equipment will appear as.`

1.subtraction from net income

3.an addition to cash flow from investing activities

4.a subtraction from cash flow from investing activities

## Question: `In Current Ratio, Current Assets are compared with:`

1.Current Profit

2.Current Liabilities

3.Fixed Assets

4.Equity Share Capital

1.high liquidity

2.higher stock

3.lower stock

4.low liquidity

1.Rs.12 lac

2.Rs.8 lac

3.Rs.4 lac

4.Rs.2 lac

1.Rs.12 lac

2.Rs.8 lac

3.Rs.4 lac

4.Rs.2 lac

## Question: `Insufficient working capital results in`

1.Block of cash

2.Loosing interests

3.Lack of production

4.Lack of smooth flow of production

1.selling

3.stocking

4.financing

## Question: `Quick assets do not include`

1.Govt. bond

2.Book debts

3.Advance for supply of raw materials

4.Inventories

## Question: `Ratio of Net Income to Number of Equity Shares known as?`

1.Price Earnings Ratio

2.Net Profit Ratio

3.Earnings per Share

4.Dividend per Share

## Question: `Significant noncash transactions would not include`

1.conversion of bonds into common stock

2.asset acquisition through bond issuance

3.treasury stock acquisition

4.exchange of plant assets

## Question: `The excess of current assets over current liabilities is known as`

1.Gross working capital

2.Permanent working capital

3.Temporary working capital

4.Net working capital

## Question: `The gross working capital is a ______________ concern concept.`

1.Going

2.money measurement

3.revenue concept

4.cost concept

## Question: `The investment in total current assets is known as`

1.Gross working capital

2.Permanent working capital

3.Temporary working capital

4.Net working capital

## Question: `The order of presentation of activities on the statement of cash flows is`

1.operating, investing, and financing

2.operating, financing, and investing

3.financing, operating, and investing

4.financing, investing, and operating

## Question: `The policy concerning quarters of profit to be distributed as dividend is termed as ______________.`

1.Profit policy

2.Dividend policy

3.Credit policy

4.Reserving policy

## Question: `The statement of cash flows`

1.must be prepared on a daily basis

2.summarizes the operating, financing, and investing activities of an entity

3.is another name for the income statement

4.is a special section of the income statement

## Question: `The time period required for the conversion of raw materials into finished goods`

1.Operating cycle period

2.Inventory conversion period

3.Receivable conversion period

4.None

## Question: `The time period required to convert the credit sales into cash`

1.Operating cycle period

2.Inventory conversion period

3.Receivable conversion period

4.None

## Question: `Which of the following are microeconomic variables that help define and explain the discipline of finance?`

1.risk and return

2.capital structure

3.inflation

4.All of the above

## Question: `Which of the following helps analysing return to equity Shareholders?`

1.Return on Assets

2.Earnings Per Share

3.Net Profit Ratio

4.Return on Investment

1.Profitability

2.Management

3.Efficiency

4.Solvency

## Question: `Which of the following is not a function performed by a financial system?`

1.Savings function

2.Liquidity function

3.Risk function

4.Social function

1.Profitability

2.Liquidity

3.Efficiency

4.Timeliness

## Question: `Which of the following ratios would be useful in assessing short-term liquidity?`

1.Current ratio, inventory turnover, fixed asset turnover

2.Average collection period, debt ratio, return on assets

3.Current ratio, quick ratio, cash-flow liquidity ratio

4.Quick ratio, accounts receivable turnover, returns on assets

## Question: `Which of the following transactions does not affect cash during a period?`

1.Write-off of an uncollectible account

2.Collection of an accounts receivable

3.Sale of treasury stock

4.Exercise of the call option on bonds payable

## Question: `Which one of the following is capital expenditure:`

1.Capital invested by owner

2.Selling expense for machine

3.Machine purchased

## Question: `Which one of the following items is not generally used in preparing a statement of cash flows?`

2.Comparative balance sheets

3.Current income statement

## Question: `Who of the following make a broader use of accounting information?`

1.Accountants

2.Financial Analysts

3.Auditors

4.Marketers

## Question: `Why is it important to calculate cash flow ratios?`

1.Firms need cash to service debt, dividends and expenses

2.Companies that generate healthy profit may be unable to convert profits into cash

3.Cash flow ratios help the analyst assess the long-term profitability of a firm

4.Both (a) and (b)

1.circulating

2.fluctuating

3.fixed

4.going

## Question: `Working capital management involves the financing and management of the assets of the firm.`

1.Fixed

2.Total

3.Current

4.None of the above

## Question: `______________ depict relationships between items on a firm's financial statements.`

1.Financial proportions

2.Fiscal relations

3.Financial ratios

4.Fiscal proportions

## More MCQS

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