Seva Sadan College of Arts, Science & commerce

F.Y.B.com(Banking & Insurance) Semester II

Internals class test Date: 22\02\2023

Sub: Financial Management Max Marks: 20 Duration: 40 Mins

INTERNAL EXAMINATIONS February 2023

Q.1 a) Multiple Choice Question - 2.5 Marks

1) Risk and _________ always go hand in hand?

a. Return b. Income
c. Profits d. Loss

2) _________ leverage will not exisit in case there is no fixed charge?

a. Operating b. Financial
c Earning d. Combined

3) Credit sales are ______ as the cash payment remains unrecevied?

a. Easy b. Safest
c. Trickier d. Risky
4) As per the _______ method of stock valuation it is assumed that latest lots are used up first?
a. LIFO b. Weighted Average
c. Simple Average d. FIFO
5) In most of the industries the most important element of cost is __________.
a. Leverage b. Labour
c. Overhead d. Material

B Match the following 2.5 Marks

Column A Column B
Cost Control Raising of funds
Default Cost French word finer
Turnover Regulation of costs
Treasurer Bad debts
Finance Sales

Q.2 Answer in one to two lines: 5 Marks

a) formula for financial & combined leverage
b) Break even analysis
c) Strategic financial management
d) Operating leverage
e) Del credre agent
Q.3 Attempt any 2 out of 3: 10 Marks
1. An analytical statement of Sip N Surf company is shown below. It is based on output sales level of 60000
units.

Particulars Amount
Sales 960000
(-)Variable cost 560000
Contribution 400000
(-)Fixed cost excluding interest 240000
Earnings before interest and Tax 160000
(-)Interest 60000
Earnings before Tax 100000
(-)Taxes @ 50% 50000
Earnings after Tax 50000

Calculate the degree of:

a) Operating leverage
b) Financial leverage
c) Combined leverage

2. Data relating to steel furniture manufacturing unit is as follows:

Particulars Amount
Half yearly demand 1000 units
Ordering costs 62.50 Rs per order
Inventory carrying costs 2 Rs per unit

Calculate:
a) EOQ per order in units.
b) Annual procurement costs.
c) Annual carrying costs.
3. The following information is available in respect of New Mumbai ltd:

Particulars Amount
Re order Quantity 3000 units
Re order period 4 to 6 weeks
Maximum consumption (Per week) 800 units
Normal consumption (Per week) 600 units
Minimum consumption (Per week) 500 units

Calculate:
a) Reorder level
b) Minimum level
c) Maximum level
d) Average stock level