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Short Questions FM

Short Questions FM

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Published by sultanrana
very useful short question answers of financial management
very useful short question answers of financial management

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Published by: sultanrana on Aug 31, 2009
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07/12/2012

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SHOR
T QUESTIONS ANSWERSFINANCIAL MANAGEMENT
 
WWW.MGTFORUM.NET
 
1
-
What is Financial Management?
The procedure of managing the financial resources, as well as accounting and financialreporting, budgeting, collecting accounts receivable
, risk management, and insurance for
a business.
 
2
-
What is Profit Maximization?
I
n
economics, profit maximization
is the procedure by which a firm determines the
price
and
output level that returns the maximum
profit
.
3
-
Who are Shareholders?
Shareholder is any
possessor
of one or more shares in a corporation. A shareholder
usually h
as
proof 
that they are a shareholder; this evidence is represented by a stock 
certificate.
 4
-
Who are Stakeholder
s
?
Stakeholders are the particular
people or groups who have a stake, or an interest, in the
conclusion
of the project. Usually stakeholders a
re from within the company, and could
include internal clients, management, employees, administrators... etc
5
-
Define Financing?
The way in which a proposed purchaser intends to make up the difference between cashon hand and the purchase price.
6
-
What is Investment?
Money put in property or other project
s
with the hope of making a profit, with enoughsecurity to return and protect the capital; not speculation.
7
-
What is Capital budgeting?
 The procedure of managing capital assets by means of a capital
budget. This may cover
an yearly or longer period.
8
-
Define Chief Financial Officer (CFO)?
 
The person liable for management of an organization's overall financial plans and
policies and the management of accounting practices. The job usually includes di
recting
the treasury, budgeting, auditing, and tax accounting and purchasing real state.
9
-
Define Asset Management?
Careful
administration of investable (liquid) assets, aimed at achieving an
optimum
risk 
-
reward
ratio
.
 
 
SHOR
T QUESTIONS ANSWERSFINANCIAL MANAGEMENT
 
WWW.MGTFORUM.NET
 
10
-
Who are Creditors?
 
These ar
e your suppliers. This includes people and companies who have given you creditor terms, and they would have to be repaid by you or the company at a future date.
 
11
-
 
What is Capital Structure?
 
The capital structure of a company is the particular mixture o
f debt,
equity
and other
sources of finance that it uses to fund its long term financing. The key division in capitalstructure is between debt and equity. The amount of debt funding is measured by
gearing
.
12: Define Following:
 
Income Statement
 
Balanc
e Sheet
Cash Flow Statement
 
A
 
document generatedmonthly and/or annuallythat reports the earnings of a company by stating allrelevant income and allexpenses that have beenincurred to generate thatincome. Also referred to as
a profit and loss statemen
t.
 A statement of the financial
position of a business which
states the assets, liabilities,
and owners' equity at aparticular point in time. Inother words, the BalanceSheet illustrates your
business's net value.
 A financial statement thatreflects the inflow of revenue vs. the outflow of expenses resulting fromoperating, investing andfinancing activities during a
specific time period
 
13
-
What is Liquidity?
 
Liquidity refers to the ability of people to get into and out of investments.
A "liquid" stoc
k is astock with a lot of volume that is easy to buy and sell.
 
14
-
 
What is Solvency?
 
The ability of a company to meet all its obligations and it is calculated as the existing capital
divided by the required capital.
15
-
 
Define Capital Structure?
 
A mix o
f a company's long
-
term
 
debt,
detailed
short
-
term debt, common equity andpreferred equity. The capital structure is
 
how a firm finances its overall operations and
growth by
 
using different sources of funds.
 
16
-
 
What is Book Keeping?
 
Bookkeeping is the recording of all financial transactions undertaken by an individual or
organization.
 
 
SHOR
T QUESTIONS ANSWERSFINANCIAL MANAGEMENT
 
WWW.MGTFORUM.NET
 
17
-
 
Define Return on Investment (ROI):
 
A performance measure used to assess the effectiveness of an
investment or to evaluate
the efficiency of a number of different investments. To calculate ROI, the benefit (return)
of an investment is divided by the cost of the investment; the result is expressed as a
percentage or a ratio.
 
18
-
 
Define Return
on Assets
(ROA)
 
An indicator of how profitable a company is relative to its total assets.
ROA gives an
idea
 as to how efficient 
management is
 
at using its assets to produce earnings.
 Calculated
by dividing a company's yearly earnings by its total assets, ROA is displayed as a
percentage. Sometimes this is referred to as "return on investment".
 
19
-
What is Bond?
 
A certificate of debt (usually interest-
bearing or discounted) that is issued by a
government or company in order to raise money; the issuer is required to pay a fixed sumyearly until maturity and then a fixed sum to repay the principal.
 
20
-
 
A little about bonds
 
·
 
Face Value:
 
Prin
ted on the bond, never changes,
and the
amount you get at maturity.
·
 
Maturity:
P
rinted on the bond, never
changes,
the date at which you get the face value
paid
·
 
Coupon
rate:
P
rinted on the bond, never changes, the percentage of Face Value that is
pa
id as interest each year [actually one half of the interest is paid every six months]
 
·
 
Yield
or market yield:
Not on the bond, changes every day, determined by supply anddemand of bonds in the bond market
·
 
Mar
ket value or price of the bond:
 
not on the bond, changes every day, calculatedby figuring the present value of the coupon payments and the present value of the facevalue at maturity at the discount rate set equal to the market yield.
 
21
-
 
Define Valuation
:
 
It
is the act or procedure that determines the value of a business or a security or an asset.
 

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