Advanced Financial Management Important Question Bank [BCOM 4th SEM NEP Syllabus 2025]

Advanced Financial Management Important Question Bank
BCOM 4th SEM NEP Syllabus 2025

Unit – I: Introduction to Financial Management

Q. What it financial management/Business finance? What are its features? Explain its scope.  2014, 2018, 2024

Q. Explain the objectives and importance of financial management in modern era.  2012, 2013, 2014, 2015, 2016. 2021

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. 2013, 2014, 2016, 2017, 2018, 2019, 2021, 2022, 2023, 2024

Q. Explain various objectives of financial management. (Profit maximisation and wealth maximisation)  2012, 2013, 2014, 2015, 2016, 2017, 2021, 2019, 2022, 2023, 2024

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

Q. What do you mean by Capital structure and Optimal Capital Structure? How it is determined? Explain its significance.      2017

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

Q. What do you mean by the term Leverage? What are its various types? Explain their features.   2012

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?

Unit – II: Investment Decisions and Cost of Capital

Q. What do you mean by Investment Decisions or capital budgeting? What are its characteristics? Discuss various techniques of investment decisions.                      2012, 2021, 2023, 2024

Q. Explain the significance of investment decisions. What are its limitations?     2013, 2019, 2021, 2023

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?                            2016, 2019, 2022

Q. What is meant by cost of capital? What are the components of the cost of capital? How is the cost of new equity issues determined?        2017, 2018SN, 2021

Q. What are various sources of long term finance? Explain them briefly.

Q. Write short note on:

Ø  Various Capital Budgeting Techniques: 2013, 2014, 2015, 2016, 2017, 2018

Ø  Weighted average cost of capital     2022

Ø  Capital Budgeting Decisions process                               2016, 2024

Q. Practical: Calculation of Leverage, Calculation of Payback period method, NPV, Rate of Return, Capital Structure, Cost of Equity and Debt Capital.

SOLUTIONS: LINK OF ALL PRACTICAL PROBLEMS VIDEOS

Unit – III: Dividend Decisions

Q. What is Dividend and Dividend Policy? What are various types of dividend and dividend policies?     2014SN, 2015, 2016, 2017, 2023, 2024

Q. What are the factors affecting dividend decision of a firm? Explain the significance of dividend decision. 2014, 2024

Q. Explain the MM theory of dividend distribution. Mention its assumptions. What are the major criticisms to this theory of irrelevance?                  2012, 2013, 2015, 2016, 2018, 2021, 2023

Q. Explain the Walter’s theory of dividend distribution. Mention its assumption. What are the shortcomings to this theory?                2017, 2019, 2022, 2024

Q. Explain the Gordon’s theory of dividend distribution. Mention its assumption. What are the shortcomings to this theory?                2024

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?                 2012, 2013, 2014, 2019, 2021

Q. “Retained earning does not involve any cost”. Do you agree? Discuss the advantages and limitations of retained earnings/ploughing back of profit.                          2019, 2022, 2024

Q. Write Short notes on:

Ø  Stable Dividend policy                           2012, 2017

Ø  Optimal Payout Ratio                            2013, 2017, 2022

Ø  Dividend Payout Ratio                           2014

Unit – IV: Management of Working Capital (Part A)

Q. Explain the concept of working capital. Why it is needed? What are the factors affecting working capital requirement of a firm?                 2015, 2016, 2017SN, 2018, 2022, 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?        2017, 2024

Q. Explain various methods for determination of working capital.

Q. Explain various sources of long term and short term working capital of a firm.             2012, 2019, 2021

Q. Practical Questions: Estimation of Working Capital Requirement, Preparation of Balance Sheet, and Calculation of Net operating cycle. (Every year one question is asked)

Q. Short notes:

Ø  Working Capital                       2014

Ø  Financial forecasting and planning                  2016

Ø  Working capital management and its significance                    2016, 2018

Ø  Operating Cycle and Net Operating Cycle     2022

Ø  Trade Credit

Ø  Capital Gearing                                        2017, 2022

Unit – IV: Management of cash and receivables, Inventory Control (Part B)

Q. What is cash management? What are its objectives and importance?

Q. Explain various strategies of cash management.

Q. What is receivable management? Mention various factors affecting size of receivables. Explain various policies of receivable management.

Q. What is inventory management? Explain various techniques of inventory management.

Q. Write short notes on:

a) EOQ

b) ABC Analysis

c) Credit policy

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