Financial Management is a study of planning, designing, directing and managing the economic activities such as the utilization of capital and acquisition of the firm. To put it in other words, it is applying general management standards to the financial resources of the firm.
It applies management ethics to the financial resources of a company. This practice controls all the economic operations of an enterprise like utilization of funds, procurement of funds, payment, accounting, risk assessment and everything related to its cash.
Given below are essential MCQs on Financial Management to analyze your understanding of the topic. The answers are also given for your reference.
Q1. Investment can be defined as
A) Person’s dedication to purchasing a house or flat
B) Use of capital on assets to receive returns
C) Usage of money on a production process of products and services
D) Net additions made to the nation’s capital stocks
Answer: B
Q2. The concept of Financial management is
A) Profit maximization
B) All features of obtaining and using financial resources for company operations
C) Organization of funds
D) Effective Management of every company
Answer: B
Q3. What is the primary goal of financial management?
A) To minimise the risk
B) To maximise the owner’s wealth
C) To maximise the return
D) To raise profit
Answer: B
Q4. GST is a consumption of goods and service tax based on.
Answer: D
Q5. The finance manager is accountable for.
A) Earning capital assets of the company
B) Effective management of a fund
C) Arrangement of financial resources
D) Proper utilisation of funds
Answer: C
Q6. The market value of the shares is decided by
A) The investment market
B) The government
D) The respective companies
Answer: A
Q7. The capital budget is associated with.
A) Long terms and short terms assets
C) Long terms assets
D) Short term assets
Answer: C
Q8. CAPM stands for.
A) Capital asset pricing model.
B) Capital amount printing model.
C) Capital amount pricing model.
D) Capital asset printing model.
Answer: A
Q9. What does financial leverage measure?
A) No change with EBIT and EPS
B) The sensibility of EBIT with % change with respect to output
C) The sensibility of EPS w.r.t % change in the EBIT level
D) % variation in the level of production
Answer: C
Q10. From the below-mentioned items which are financial assets?
Answer: D
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