Fundamentals of Financial Management Important Questions [Gauhati University BCOM 5th SEM CBCS Pattern]

Fundamentals of Financial Management Important Questions
Gauhati University B. Com 5^th Sem

Unit – 1: Introduction to Financial Management

Q. What it financial management/Business finance? What are its features? Explain its scope and functions. 2018, 2021, 2023

Q. Explain the importance and limitations of financial management in modern era. 2013, 2014, 2019

Q. Discuss the role and responsibilities of modern finance manager in an establishment. Discuss some of the crucial financial problems that a decision maker faces today.    2017

Q. Explain various objectives of financial management. (Profit maximisation and wealth maximisation)                  2013, 2014, 2016, 2018, 2019, 2021, 2023

Q. What is Finance Functions? Explain various types of Decisions to be taken under financial management. 2014, 2017, 2018, 2019

Q. “Maximization of Profit is regarded as the proper objectives of investments but it is not as exclusive as maximizing shareholder’s wealth” – Explain.    2015, 2016, 2019

Q. Compare and Contrast between profit maximisation and wealth maximisation objectives of financial management.

Q. Discuss the various factors that affect stock valuation. Write a brief note on valuation of securities. 2021

Q. Discuss the various factors that affect bond value. Also explain the steps in bond valuation. 2021

Q. State the meaning of risk and return. How they are related? 2016

Q. Explain CAPM.            2014

Unit – 2: Investment Decisions (Capital Budgeting)

Q. What do you mean by Investment Decisions or capital budgeting? What are its characteristics? Discuss the capital budgeting process.         2021

Q. Explain the significance of investment decisions. What are its limitations?    

Q. Explain various methods and techniques of capital budgeting: 2014, 2017, 2018, 2019, 2023

- Payback period method             2021

- Accounting Rate of return method

- Net Present Value Method                       2015, 2016

- Profitability Index Method                       2013, 2014, 2017

- Internal Rate of Return Method             2015, 2016, 2018

Q. Practical: Calculation of Payback period method, NPV, Rate of Return (Almost every year)

Unit – 3: Financing Decisions (Cost of Capital, Leverage and Capital Structure)

Q. What do you mean by Cost of Capital? How it is determined? Explain its significance. What are the problems associated with determination of cost of Capital?            2013, 2016, 2021, 2023

Q. What is meant by cost of capital? What are the components of the cost of capital? How is the cost of equity, debtand preference shares are determined?        2015, 2016

Q. What do you mean by the term Leverage? What are its various types? Explain their features, importance and limitations.

Q. What is ‘financial leverage’? How does it magnify the revenue available for equity shareholders? Discuss the relationships between financial leverage and debt financing. 

Q. What do you mean by ‘financial leverage’? Distinguish between financial leverage and operating leverage. Do you think that they are related to capital structure?

Q. What do you mean by Capital structure and Optimal Capital Structure? How it is determined? Explain itssignificance.                      2013, 2015, 2017

Q. Explain the factors affecting capital structure of a company. 2016, 2018, 2019

Q. Define capital structure. Using imaginary figures show how to determine the value of firm under (1) the netincome (NI) approach and (2) the net operating income (NOI) approach. 2015, 2016

Q. Write short note on:

Ø  Weighted average cost of capital

Ø  Trading on Equity/Financial Leverage            

Ø  Optimal Capital Structure

Ø  Relationship and Difference between Financial leverage and operating leverage 2014, 2015, 2018, 2019, 2021

Q. Practical Problems: Calculation of Cost of Equity, Preference shares and Debt; Calculation of leverage

Also Read: Fundamentals of Financial Management Question Paper and Solutions

- Fundamentals of Financial Management Question Paper 2021

- Fundamentals of Financial Management Question Paper 2023

- Fundamentals of Financial Management Solved Question Paper 2021

- Fundamentals of Financial Management Solved Question Paper 2023

Also Read: Fundamentals of Financial Management Important Questions (GU)

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Unit – 4: Dividend Decisions

Q. What is Dividend and Dividend Policy? What are various types of dividend and dividend policies?     2021, 2023

Q. What are the factors affecting dividend decision of a firm?    2013, 2014, 2015, 2017, 2019, 2023

Q. Explain the MM theory of dividend distribution. Mention its assumptions. What are the major criticisms to this theory of irrelevance?   2014, 2016, 2018, 2021

Q. Explain the Walter’s theory of dividend distribution. Mention its assumption. What are the shortcomings to this theory?               

Q. What do you mean by ploughing back of profits? Mention the purpose of creating it. What are the factors that influence the ploughing back of profit?                

Q. “Retained earning does not involve any cost”. Do you agree? Discuss the advantages and limitations of retained earnings/ploughing back of profit.

Q. Write Short notes on:

Ø  Stable Dividend policy          

Ø  Optimal Payout Ratio           

Ø  Dividend Payout Ratio          

Unit – 5: Working Capital Decisions

Q. Explain the concept of working capital. Why it is needed? 

Q. What are the factors affecting working capital requirement of a firm?   2014, 2017, 2018, 2023

Q. What are the advantages of adequate working capital? What shall be the repercussions if a firm has (i) redundant working capital and (ii) inadequate working capital?

Q. Explain various methods for determination of working capital.   2015, 2017, 2019

Q. Explain various sources of long term and short term working capital of a firm.             2015, 2018

Q. What are the basic strategies of efficient cash management? Discuss the importance of various tools tool of liquidity management.       2019, 2021

Q. What is inventory management? Explain its objectives, merits and demerits.

Q. Short notes:

Ø  Working Capital                      

Ø  Financial forecasting and planning                 

Ø  Working capital management and its significance   

Ø  Net operating Cycle

Ø  Trade Credit

Ø  Capital Gearing

Q. Practical Questions: Estimation of Working Capital Requirement, Preparation of Balance Sheet, and Calculation of Net operating cycle.