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.
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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