BBA-13
December Examination 2017
BBA Pt. III Examination
Financial Management
Paper BBA-13
Time 3 Hours Max. Marks 80
Note: The question paper is divided into three sections B and C. Write answers as per given instructions.
Section A 8 × 2 16
(Very Short Answer Questions)
Note: Answer all questions. As per the nature of the question delimit your answer in one word, one sentence or maximum upto 30 words. Each question carries 2 marks.
Define Financial Management.
Explain the comparative financial statement technique.
What is quick ratio. Give formula.
State four objectives of preparing funds flow statement.
What is Miller-orr model of cash management?
What is Liberal Dividend Policy?
What is meant by Trading on Equity?
(viii) What do you understand by 'ABC Analysis of Inventory Control'.
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BBA-13 100 4 (P.T.O.)
BBA-13 100 4 (Contd.)
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Section B 4 × 8 32
(Short Answer Questions)
Note: Answer any four questions. Each answer should not
exceed 200 words. Each question carries 8 marks.
"Finance is the life-blood of Industry". Elucidate this statement
with suitable illustrations.
The Balance Sheet of Paras Ltd. as at 31st March, 2013 and
2014 are given below:
Balance Sheet
As on 31st March ..............
Liabilities 2013
Rs.
2014
Rs.
Assets 2013
Rs.
2014
Rs.
Share Capital 65,000 75,000 Fixed Assets 15,000 25,000
Reserve
Surplus 5,040 5,560 Cash 9,000 7,800
Debentures 12,000 Debtors 14,900 17,700
B/P 10,360 11,840 Stock 49,200 42,700
Provision for
Bad Debts 700 800 Goodwill 5,000
93,100 93,200 93,100 93200
Additional Information:-
Dividend amounting to Rs. 3,500 were paid during the
year.
ii) Fixed Assets were purchased for Rs. 10,000. You are
required to prepare cash flow statement.
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BBA-13 100 4 (P.T.O.)
Shyam Ltd. has issued 10%. 10,000 preference shares of
Rs. 100 each and has incurred following expenses:-
Under writing commission
Brokerage
Other Expenses Rs. 10,000
Assuming corporate tax rate at find out the cost of
preference share capital if shares are issued
At par
At a premium of 10%.
What is meant by 'Capital Structure'? Explain various theories
of capital structure.
Write short notes on following:-
Economic order quantity.
ii) FSND classification of material control.
What is the concept of 'Working Capital'? What factors
determine the need of working capital?
Examine the short term sources from which finance can be
raised.
Explain the meaning of the term 'Dividend Policy and critically
examine the essentials of a Sound Dividend Policy.
Section C 2 × 16 32
(Long Answer Questions)
Note: Answer any two questions. You have to delimit your each answer maximum upto 500 words. Each question carries 16 marks.
10) What do you understand by 'Financial Statement Analsysis'? Explain various techniques of Financial Analysis.
11) Write explanatory notes on following:-
Operating Leverage.
ii) Financial Leverage.
iii) Debt Equity Ratio.
iv) Debtors Turnover Ratio.
12) A Company has to select one of the following two projects:-
Proposal A
Rs.
Proposal B
Rs.
Cost
11,000
10,000
Cash Inflows:
Year 1
6,000
1,000
Year 2
2,000
1,000
Year 3
1,000
2,000
Year 4
5,000
10,000
Using the internal rate of return method, suggest which project is preferable.
Discount factor
Year
1
2
3
4
10%
.909
.826
.751
.683
12%
.893
.797
.712
.636
15%
.870
.756
.658
.572
13) Explain the role of "Managing Finance in a business and its utility".
BBA-13 100 4
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