MBA/MBA Financial Management MCQ Set 12 Sample Test,Sample questions

Question:
A company would be expected to generate small amounts of cash provided by operating activities during the

1.introductory phase

2.growth phase

3.maturity phase

4.decline phase


Question:
A financial statement is an:

1.Written report that quantitatively describes a firm's financial health

2.Set of ratios which depict relationships between a firm's financial Items

3.Itemized forecast of a company's income, expenses, and capital Needs

4.Estimate of a firm's future income and expenses


Question:
A firm's ______________ reflects the results of its operations over a specified period and shows whether it is making a profit or is experiencing a loss

1.Statement of cash flows

2.Balance sheet

3.Statement of owners' equity

4.Income statement


Question:
Authorised capital of a company is Rs.5 lac,40% of it is paid up.Loss incurred during the year is Rs.50,000. Accumulated loss carried from last year is Rs.2 lac. The company has a Tangible Net Worth of

1.Nil

2.Rs.2.50 lac

3.(-)Rs.50,000

4.Rs.1 lac


Question:
Creditors would not be interested in which group of ratios ?

1.Solvency

2.Shareholder

3.Profitability

4.Capital Structure


Question:
Current ratio is 2:5. Current liability is Rs.30000. The Net working capital is

1.Rs.18,000

2.Rs.45,000

3.Rs.(-) 45,000

4.Rs.(-)18000


Question:
Debt Equity Ratio is 3:1, the amount of total assets Rs.20 lac,current ratio is 1.5:1 and owned funds Rs.3 lac. What is the amount of current asset?

1.Rs.5 lac

2.Rs.3 lac

3.Rs.12 lac

4.none of the above


Question:
Debt to Total Assets Ratio can be improved by:

1.Borrowing More

2.Issue of Debenture

3.Issue of Equity Shares

4.Redemption of Debt


Question:
Debt to Total Assets Ratio can be improved by:

1.Borrowing More

2.Issue of Debenture

3.Issue of Equity Shares

4.Redemption of Debt


Question:
Finance is vital for which of the following business activity (activities) ?

1.Marketing Research

2.Product Pricing

3.Design of marketing and distribution channels

4.All of the given options


Question:
Financial leverage means

1.Use of more debt capital to increase profit

2.High degree of solvency

3.Low bank finance

4.None of the above


Question:
If a company has both an inflow and outflow of cash related to property, plant, and equipment, the

1.two cash effects can be netted and presented as one item in the investing activities section

2.cash inflow and cash outflow should be reported separately in the investing activities section

3.two cash effects can be netted and presented as one item in the financing activities section

4.cash inflow and cash outflow should be reported separately in the financing activities section


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:
If a firm sold stock on credit then which of the following would be the result ?

1.Acid Test Ratio increases

2.Acid test ratio decreases

3.Current ratio decreases

4.Current ratio increases


Question:
In Net Profit Ratio, the denominator is:

1.Net Purchases

2.Net Sales

3.Credit Sales

4.Cost of goods sold


Question:
In Net Profit Ratio, the denominator is:

1.Net Purchases

2.Net Sales

3.Credit Sales

4.Cost of goods sold


Question:
In the balance sheet amount of total assets is Rs.10 lac, current liabilities Rs.5 lac & capital & reserves are Rs.2 lac .What is the debt equity ratio?

1.1;1

2.1.5:1

3.2:1

4.none of the above


Question:
Long-term financing plans with low liquidity have:

1.High return and high risk

2.Moderate return and Moderate risk

3.Low return and low risk

4.None of the above


Question:
Maximising shareholders wealth means maximizing the

1.Value of the firm's assets

2.Amount of the firm's cash

3.Value of the firm's investments

4.Total market value of the firm's common stock


Question:
Properietory ratio is calculated by

1.Total assets/Total outside liability

2.Total outside liability/Total tangible assets

3.Fixed assets/Long term source of fund

4.Properietors'Funds/TotalTangible Assets


Question:
Quick assets do not include

1.Govt.bond

2.Book debts

3.Advance for supply of raw materials

4.Inventories


Question:
Ratio analysis allows a firm to compare its performance to:

1.Other firms in the industry

2.Other time periods within the firm

3.Other industries

4.None of the above


Question:
Return on Assets and Return on Investment Ratios belong to:

1.Liquidity Ratios

2.Profitability Ratios

3.Solvency Ratios

4.Turnover


Question:
Return on Assets and Return on Investment Ratios belong to:

1.Liquidity Ratios

2.Profitability Ratios

3.Solvency Ratios

4.Turnover


Question:
Short term sources are

1.Bank credit

2.Public deposit

3.Commercial papers

4.All of the above


Question:
The ability of a firm to convert an asset to cash is called ______________.

1.Liquidity

2.Solvency

3.Return

4.Marketability


Question:
The ability of a firm to convert an asset to cash is called ______________.

1.Liquidity

2.Solvency

3.Return

4.Marketability


Question:
The acquisition of land by issuing common stock is

1.a noncash transaction that is not reported in the body of a statement of cash flows

2.a cash transaction and would be reported in the body of a statement of cash flows

3.a noncash transaction and would be reported in the body of a statement of cash flows

4.only reported if the statement of cash flows is prepared using the direct method


Question:
The appropriate objective of an enterprise is:

1.Maximisation of sale

2.Maximisation of owners wealth

3.Maximisation of profits

4.None of these


Question:
The balance sheet is alternately known as:

1.Assets statement

2.Statement of financial position

3.Statement of profit and loss

4.None of the given options


Question:
The dividend-pay out ration is equal to

1.The dividend yield plus the capital gains yield

2.Dividends per share divided by earnings per share

3.Dividends per share divided by par value per share

4.Dividends per share divided by current price per share


Question:
The fixed proportion of working capital should be generally financed from the ______________ capital sources.

1.fixed

2.variable

3.semi-variable

4.borrowed


Question:
The length or time period of the operating cycle of any firm can be defined as

1.Operating cycle period

2.Inventory conversion period

3.Receivable conversion period

4.None


Question:
The liability which should be paid within a period of one year is known as

1.Current asset

2.Current liability

3.Fixed asset

4.Variable asset


Question:
The most practical way to interpret or make sense of a firm's historical financial statements is through:

1.Profit analysis

2.Ratio analysis

3.Estimate statement

4.Forecast Hypothesis


Question:
The time required to process and execute an order is called ______________.

1.allowed time

2.lead time

3.accepted time

4.fixed time


Question:
Which of the following is a measure of Debt Service capacity of a firm?

1.Current Ratio

2.Acid Test Ratio

3.Interest Coverage Ratio

4.Debtors Turnover


Question:
Which of the following is a measure of Debt Service capacity of a firm?

1.Current Ratio

2.Acid Test Ratio

3.Interest Coverage Ratio

4.Debtors Turnover


Question:
Which of the following is not a current asset

1.Cash in hand

2.Cash at bank

3.Debtors

4.Creditors


Question:
Which of the following statement is considered as the accountant's snapshot of firm's accounting value as of a particular date?

1.Income Statement

2.Balance Sheet

3.Cash Flow Statement

4.Retained Earnings Statement


Question:
Which of the following statements is false?

1.No rules of thumb apply to the interpretation of financial ratios

2.Financial ratios can indicate areas of potential strength and weakness

3.Financial ratios are predictive

4.Financial ratios can serve as screening devices


Question:
Working Capital management is managing

1.Long term assets

2.Short term assets and liabilities

3.Long term liabilities

4.Only short term assets


Question:
Working Capital Turnover measures the relationship of Working Capital with:

1.Fixed Assets

2.Sales

3.Purchases

4.Stock


Question:
Working Capital Turnover measures the relationship of Working Capital with:

1.Fixed Assets

2.Sales

3.Purchases

4.Stock


Question:
_____________ is the ability of a firm to earn a profit.

1.Profitability

2.Liquidity

3.Efficiency

4.Effectiveness


Question:
______________ are itemized forecasts of a company's income, expenses, and capital needs and are also an important tool for financial planning and control.

1.Profitability statements

2.Budgets

3.Owners' equity statements

4.Statements of cash flows


Question:
______________ capital structure means an ideal combination of borrowed and owned capital that may attain the marginal goal.

1.Preference share

2.Optimum

3.Equity

4.Debt


Question:
______________ is how productively a firm utilizes its assets relative to its revenue and its profits.

1.Efficiency

2.Effectiveness

3.Stability

4.Liquidity


Question:
______________ management is the important task of the finance manager.

1.Debt

2.Equity

3.Profit

4.Cash


Question:
______________ of a firm refers to the composition of its long -term funds and its capital structure:

1.Capitalisation

2.Over Capitalisation

3.Under Capitalisation

4.Market Capitalisation


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