What is meant by capital structure?
14. Discuss the two objectives of Financial Planning
15. What is ‘financial risk’? Why does it arise?
16. . Define a ‘current assets’ and give four examples.
17. Financial management is based on three broad financial decisions. What are these?
18. What is the main objective of financial management? Explain briefly.
Answers
Answer:
The capital structure is the particular combination of debt and equity used by a company to finance its overall operations and growth. Debt comes in the form of bond issues or loans, while equity may come in the form of common stock, preferred stock, or retained earnings.
14. Finance managers make short term financial plan
called budgets. Objectives of Financial Planning: Financial planning is done to achieve the following two ...
15. Financial Risk: Financial Risk as the term suggests is the risk that involves financial loss to firms. Financial risk generally arises due to instability and losses in the financial market caused by movements in stock prices, currencies, interest rates and more.
16. Current assets are short-term, liquid assets that are expected to be converted to cash within one fiscal year. These assets include cash and cash equivalents, marketable securities, accounts receivable, inventory and supplies, prepaid expenses, and other liquid assets.
17. Financial management refers to the efficient acquisition, allocation and usage of funds of the company. It deals in three main dimensions of financial decisions namely, Investment decisions, Financial decisions and Dividend decisions.
18. Financial Management means planning, organizing, directing and controlling the financial activities such as procurement and utilization of funds of the enterprise. It means applying general management principles to financial resources of the enterprise. Main aim of any kind of economic activity is earning profit.