Busfin

Question 1

A body of business concerned with the efficient and effective use of either equity capital, borrowed cash or any other business funds as well as taking the right decision for profit maximization and value addition of an entity.

Answer 1

Financial Management

Question 2

It ensures that financial information is prepared in accordance with accounting principles and International Financial Reporting Standards.

Answer 2

Disseminating

Question 3

process seeks to match the organization’s operational and investment activities to its overall cash flow capabilities.

Answer 3

Planning

Question 4

Financial management prescribes the appropriate contingency measures for both operational and strategic risks.

Answer 4

Managing Risks

Question 5

Helps business owners and employees to prevent or reduce the risks from theft, fraud and embezzlement.

Answer 5

Insurance and automated financial management systems

Question 6

The financial management function exerts internal controls over financial resources with the objective of ensuring efficient resource utilization.

Answer 6

Exerting Controls

Question 7

Begin with goal setting, saving money, and patiently working toward growing an investment. The
steps should be realistic but also give a person or a business something to strive for in the future.

Answer 7

Sound Financial Principles

Question 8

Gives an incentive for adhering to principles of financial management.

Answer 8

Setting a goal

Question 9

It allows a company to provide a monetary value for items that make up their inventory.
Inventories are usually the largest current asset of a business, and proper measurement of them is necessary to assure accurate financial statements.

Answer 9

Inventory Valuation

Question 10

It is a comprehensive evaluation of someone’s current and future financial state by using
currently known variables to predict future cash flows, asset values and withdrawal plans.

Answer 10

Financial Plan

Question 11

provide consumers and commercial clients with a wide range of services and different types of banking products.

Answer 11

Financial institutions

Question 12

offer various types of insurance, ranging from life insurance to insurance on mortgage contracts.

Answer 12

Financial institutions

Question 13

Are legal agreements that require one party to pay money or something else of value or to promise to pay under stipulated conditions to a counterpart in exchange for the payment of interest, for the acquisition of rights, for premiums, or for indemnification against risk.

Answer 13

Financial Instrument

Question 14

Is the all-encompassing term that covers the buying and selling of monetary goods.

Answer 14

Financial Market

Question 15

consists of the primary and secondary markets, which define the origin of the monetary good, and a wide selection of markets that define the type of monetary good.

Answer 15

Financial Market

Question 16

Is a type of security that represents the ownership in a company.

Answer 16

Equity

Question 17

Allows a group of people to pool their money together and have it professionally managed, in keeping with a predetermined investment objective. This investment avenue is popular because of its cost-efficiency, risk-diversification, professional management and sound regulation.

Answer 17

Mutual Funds

Question 18

are fixed income instruments which are issued for the purpose of raising capital.

Answer 18

Bonds

Question 19

Investing in bank or post-office deposits is a very common way of securing surplus funds.
These instruments are at the low end of the risk-return spectrum.

Answer 19

Deposits

Question 20

These are relatively safe and highly liquid investment options. Treasury bills and money market funds are cash equivalents.

Answer 20

Cash Equivalent

Question 21

is one of the most important roles of financial institutions.

Answer 21

Provision of credit

Question 22

Refers to the movement of money in and out of a mutual fund.

Answer 22

Flow of Funds

Question 23

control an organization’s assets, including its investments and cash, to maximize their efficient use.

Answer 23

Financial managers

Question 24

Records that provide an indication of the organization’s financial status.

Answer 24

Financial statements

Question 25

is formal records of the financial activities of a business, person, or other entity.

Answer 25

Financial report

Question 26

Reports on a company’s assets, liabilities, and Ownership equity as of a given point in time.

Answer 26

Balance sheet / Statement of Financial Position or Condition

Question 27

Reports on a company’s income, expenses, and profits over a period of time.

Answer 27

Income statement / Profit and Loss statement (or “P&L”),

Question 28

provide information on the operation of the enterprise. These include sale and the various expenses incurred during the processing state.

Answer 28

Profit & Loss account

Question 29

It reports on a company’s cash flow activities; particularly it is operating, investing and financing activities.

Answer 29

Cash flow statements

Question 30

It explains the changes in a company’s retained earnings over the reporting period.

Answer 30

Statements of retained earnings

Question 31

Refers to the ability to convert the asset into cash – some items may be more liquid than others.

Answer 31

Liquidity

Question 32

A term that is used to refer to the current level of financial stability associated with a company or individual. The term can also apply to the status of a particular area of finances, such as insurance, cash flow, or property.

Answer 32

Solvency

Question 33

Means that the business has cash in hand to honor current obligations, or at least has assets that can quickly be converted to cash without impacting the ability of the business to continue functioning.

Answer 33

Liquidity solvency

Question 34

Refers to the potential of a venture to be financially successful.

Answer 34

Profitability

Question 35

Enables investors and corporate management to take a deep look at a company’s finances, with a special emphasis on how financial statement items vary over a period of time.

Answer 35

Vertical analysis

Question 36

A business can quickly identify strengths, weaknesses, and trends

Answer 36

Vertical analysis

Question 37

Refers to a type of fundamental analysis in which a financial analyst uses certain financial data to assess a company’s performance over time.

Answer 37

Horizontal analysis

Question 38

Simple but effective tool that is often used to get an accurate picture of the financial stability of a company.

Answer 38

Current Ratio

Question 39

Is a profitability ratio that shows the relationship between gross profit and total net sales revenue.

Answer 39

Gross Profit Ratio

Question 40

It is used to examine the ability of a business to create sellable products in a cost-effective
manner.

Answer 40

Gross Profit Ratio

Question 41

Is a standard financial calculation that determines the number of times a business replaces its inventory to generate its current level of sales over a given time period, typically 12 months.

Answer 41

Inventory Turnover Ratio

Question 42

A process of setting objectives, assessing assets and resources, estimating future financial needs, and making plans to achieve monetary goals.

Answer 42

Financial Planning