BBA-13
December Examination 2016
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 Type Questions)
Note: Answer all questions. As per the nature of the question you delimit your answer in one sentence or upto 30 words. Each question carries 2 marks.
Give two limitations of Financial Management.
What are Intangible Assets? Give three examples.
What do you mean by Trend Analysis?
Name four factors determining working capital.
What will be the Economic Order Quantity, if annual demand is 12000 units, ordering cost is Rs. 90 per order and inventory carrying cost is Rs. 15 per annum.
Give any two differences between shares and debentures.
001
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BBA-13 100 4 (Contd.)
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State any two features of optimal capital structure.
(viii) What is operating leverage? Give formula.
Section B 4 × 8 32
(Short Answer Type Questions)
Note: Answer any four questions. Each answer should not
exceed 200 words. Each question carries 8 marks.
From the following statement calculate:
Current Ratio Liquidity Ratio Proprietory Ratio
Solvency Ratio
Condensed Balance Sheet
Liabilities Rs. Assets Rs.
Paid up capital 100000 Fixed Assets 219810
Reserve and surplus 84500 Stock 49460
Debentures 100000 Trade Debtors 11710
Bills payable 6500 Cash at bank 26020
Creditors 16000
307000 307000
Define 'cost of capital'. Explain its significance in financial
decision making.
Write short notes on following:
Common size statements
Financial leverage
What is cash flow statement? Explain the classification of
cash flows.
Explain the terms 'Dividend polity and critically examine the
BBA-13 100 4 (P.T.O.)
001
essentials of a sound dividend policy.
Discuss the management problems involved in the planning
and control of cash. Explain the importance of 'Cash Budget'
as main tool of cash planning.
Explain the principle of 'Trading on Equity'. Discuss it utility to
the management and point out its limitations.
Explain the following:
Net working capital
ABC Analysis of inventory control
Stock Turnover Ratio
Internal Rate of Return
Section C 2 × 16 32
(Long Answer Type Questions)
Note: Answer any two questions. Each answer should not
exceed 500 words. Each question carries 16 marks.
10) What is meant by financial management? Discuss the
objectives and salient features of financial management.
11) Evaluate the preference shares and equity shares as a
source of finance of a company.
12) What is capital budgeting? Discuss the relative merits of
Pay-back Net present value Techniques for the
appraisal of investment work.
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13) The Balance Sheet of Ram Ltd. as on December 31, 2013
and 2014 are as follows:
Items Dec. 31,
2013
Dec. 31,
2014
Assets:
Plant and machinery 500000 800000
Land and building 80000 120000
Stock 100000 75000
Sundry Debtors 150000 160000
Cash 20000 20000
850000 1175000
Liabilities and Capitals:
Share capital 500000 700000
Profit and Loss Account 100000 160000
General Reserve 50000 70000
Sundry Creditors 153000 190000
Bills payable 40000 50000
Outstanding Expenses 7000 5000
850000 1175000
Additional Information:
Depreciation of Rs. 50000 has been charged on plant and
machinery during the year 2014.
A machine was sold for Rs. 8000 during the year 2014. It
had cost of Rs. 12000 and depreciation of Rs. 7000 had
been provided on it.
Prepare a statement of changes in working capital and funds
flow statement for the year 2014.