Which of the following is not a primary function of financial management?
Correct!
Wrong :(
Answer - d) Cost accounting
2
What is the primary goal of financial management?
Correct!
Wrong :(
Answer - b) Maximising shareholder wealth
3
Which financial statement provides an overview of a companys financial position at a specific point in time?
Correct!
Wrong :(
Answer - b) Balance sheet
4
What does the term ROI stand for in financial management?
Correct!
Wrong :(
Answer - a) Return on Investment
5
Which financial ratio measures a companys ability to meet its short-term obligations with its short-term assets?
Correct!
Wrong :(
Answer - b) Current ratio
6
The process of determining the profitability of a particular investment or project is known as:
Correct!
Wrong :(
Answer - a) Capital budgeting
7
What is the formula for calculating the Net Present Value (NPV) of a project?
Correct!
Wrong :(
Answer - b) NPV = Present Value of Cash Inflows - Present Value of Cash Outflows
8
What does the term IPO stand for in finance?
Correct!
Wrong :(
Answer - a) Initial Public Offering
9
The Capital Asset Pricing Model (CAPM) is used to determine:
Correct!
Wrong :(
Answer - d) The cost of equity capital
10
What is the formula for calculating the Earnings Before Interest and Taxes (EBIT) of a company?
Correct!
Wrong :(
Answer - a) EBIT = Revenue - Expenses
11
Which of the following is not a method of raising external capital for a company?
Correct!
Wrong :(
Answer - c) Retained earnings
12
The process of matching the maturities of assets and liabilities is known as:
Correct!
Wrong :(
Answer - d) Working capital management
13
What does the Debt to Equity ratio measure?
Correct!
Wrong :(
Answer - d) The level of investment in the companys equity
14
The Weighted Average Cost of Capital (WACC) is a combination of the cost of:
Correct!
Wrong :(
Answer - a) Debt and common stock
15
What is the primary purpose of financial forecasting?
Correct!
Wrong :(
Answer - b) To estimate future cash flows and financial needs
16
The process of selling accounts receivable to a financial institution to obtain cash is known as:
Correct!
Wrong :(
Answer - b) Factoring
17
Which of the following is a measure of a companys profitability?
Correct!
Wrong :(
Answer - c) Return on Assets (ROA)
18
The concept of time value of money is based on the idea that:
Correct!
Wrong :(
Answer - b) Money has more value in the future than in the present
19
What is the purpose of a cash flow statement?
Correct!
Wrong :(
Answer - c) To detail the companys sources and uses of cash over a period of time
20
What financial ratio measures a companys ability to generate profits from its equity investments?
Correct!
Wrong :(
Answer - d) Return on Equity (ROE)
21
The process of converting a companys assets into cash is known as:
Correct!
Wrong :(
Answer - a) Liquidation
22
The market value of a companys outstanding common stock is also referred to as its:
Correct!
Wrong :(
Answer - c) Market capitalization
23
Which of the following statements is true regarding risk and return in financial management?
Correct!
Wrong :(
Answer - c) Risk and return are positively correlated
24
Which of the following is a component of a companys working capital?
Correct!
Wrong :(
Answer - c) Accounts receivable
25
A financial ratio that measures a companys ability to pay its long-term debt is:
Correct!
Wrong :(
Answer - d) Interest coverage ratio
26
In the context of financial management, what does the term Diversification refer to?
Correct!
Wrong :(
Answer - b) Spreading investments across different assets to reduce risk
27
Which of the following is a measure of a companys efficiency in managing its inventory?
Correct!
Wrong :(
Answer - c) Inventory turnover ratio
28
What is the formula for calculating the return on investment (ROI) of a project?
Correct!
Wrong :(
Answer - a) ROI = (Net Profit / Initial Investment) x 100
29
The process of monitoring and managing a companys cash flows and short-term obligations is known as:
Correct!
Wrong :(
Answer - c) Liquidity management
30
What does the term Working Capital refer to?
Correct!
Wrong :(
Answer - c) The capital invested in short-term assets and liabilities
31
What financial ratio measures a companys ability to meet its interest payments on outstanding debt?
Correct!
Wrong :(
Answer - c) Interest coverage ratio
32
Which of the following is a source of long-term financing for a company?
Correct!
Wrong :(
Answer - b) Common stock
33
The concept of opportunity cost is most closely related to:
Correct!
Wrong :(
Answer - a) The time value of money
34
What is the formula for calculating the Debt to Equity ratio?
Correct!
Wrong :(
Answer - a) Debt to Equity ratio = Total Debt / Total Equity
35
The process of converting a companys assets into cash is known as:
Correct!
Wrong :(
Answer - b) Liquidation
36
What does the term Risk Management involve in financial management?
Correct!
Wrong :(
Answer - b) Identifying and mitigating financial risks
37
What financial ratio measures a companys ability to cover its short-term liabilities with its most liquid assets?
Correct!
Wrong :(
Answer - b) Acid-Test ratio
38
The concept of present value is used in finance to:
Correct!
Wrong :(
Answer - c) Determine the value of future cash flows in todays terms
39
What financial ratio measures a companys ability to generate profits from its total assets?
Correct!
Wrong :(
Answer - c) Return on Assets (ROA)
40
The process of reducing risk by investing in assets with low or negative correlations is known as:
Correct!
Wrong :(
Answer - c) Diversification
41
The formula for calculating the Net Present Value (NPV) of a project involves discounting cash flows using:
Correct!
Wrong :(
Answer - b) The risk-free rate
42
What is the formula for calculating the Price-to-Earnings (P/E) ratio of a company?
Correct!
Wrong :(
Answer - a) P/E ratio = Price per share / Earnings per share
43
Which of the following is a long-term source of financing for a company?
Correct!
Wrong :(
Answer - c) Common stock
44
The process of estimating the future value of an investment or project is known as:
Correct!
Wrong :(
Answer - b) Financial forecasting
45
The process of using financial instruments to reduce the risk associated with future cash flows is known as:
Correct!
Wrong :(
Answer - b) Risk management
46
What does the term Dividend Yield measure?
Correct!
Wrong :(
Answer - a) The percentage of a companys earnings paid as dividends to shareholders
47
The process of determining the cost of different sources of financing and their respective weights in a companys capital structure is known as:
Correct!
Wrong :(
Answer - c) Cost of capital
48
What financial ratio measures a companys ability to cover its interest expenses with its operating income?
Correct!
Wrong :(
Answer - c) Interest coverage ratio
49
The concept of opportunity cost is most relevant when making decisions about:
Correct!
Wrong :(
Answer - b) Capital budgeting
50
Which of the following is a long-term liability on a companys balance sheet?
Correct!
Wrong :(
Answer - d) Long-term debt
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Question. What is/Introduction of Financial Management
Answer. Financial Management means planning, organizing, directing and controlling the financial activities such as procurement and utilization of funds of the enterprise. It means applying general management principles to financial resources of the enterprise.