Q-5.

(a)

Explain the concept of leverage with its types and

significance.
[10]

(b)

What does schedule VI of companies act deals with?

Show a comparative study of old and revised versions.
[10]

Q-6. (a)

Why ratio analysis is important for a firm? Explain in

brief various types of ratios.
[10]

Roll No. ..

Lingayas University

(b)

Prepare a format, with imaginary figures, of schedule of

changes in working capital and funds flow statements.
[10]

BBA- MB A (I) 3 r d Y e a r ( S e m es t e r- V )
E n d - S e m es t e r E x a m i n a t i o n - D e cem b e r 2 0 1 2
F i n a n ci a l M a n a g e m e n t - II ( B A - 1 3 0 1 )

[Time: 3 Hours]

[Max. Marks: 100]

Before answering the question, candidate should ensure that they

have been supplied the correct and complete question paper. No
complaint in this regard, will be entertained after examination.

Note: Attempt Five questions in all. All questions carry equal

marks. Question no. 1 (SectionA) is compulsory. Select Four
questions from (SectionB).
Q-7. (a)

What is working capital management? Explain the

operating cycle of working capital.
[10]

(b)

Explain the method of accelerating cash inflows and

slowing cash outflows.
[10]

Section A
Q-1.

Q-8. (a)

(b)

Highlight the various factors that influence dividend

policy.
[10]
Discuss various legal and procedural aspects of dividend
policy.
[10]

CASE STUDY

[20]

Given is the profit and loss statement and balance sheet of

Jacob ltd. Redraft them for the purpose of analysis and
calculate the following ratios: (i) Gross profit ratio (ii)
current ratio (iii) debt equity ratio (iv) Stock turn over
ratio (v) liquidity ratio
PARTICULARS
Opening stock of
finished good

P & L Statement
AMOUNT (Rs)
PARTICULARS
4,00,000

By Sales

AMOUNT(Rs)
40,00,000
1

Opening stock of raw

materials

2,00,000

Purchase of raw
materials

12,00,000

4,00,000

Direct Wage

8,00,000

2,00,000

Manufacturing
expenses

4,00,000

Administration
expenses

2,00,000

Selling & Distribution

expenses

2,00,000

Loss on sale of plant

2,20,000

Interest on debentures

40,000

Net profit

By closing stock of
raw materials

Q-2. (a)

Why an efficient financial structure is required in a firm?

Explain with example.
[10]

(b)

Discuss various finance functions important for a firm to

grow.
[10]

Q-3. (a)

What are the various As of financial management?

Specify the role of each for a firm to grow.
[10]

(b)

What is demand planning and forecasting? What kind of

forecasting is done from financial perspective?
[10]

Q-4. (a)

Explain the concept of capitalization. Also discuss

various types of capitalization with there effects.
[10]

(b)

Calculate the cost of capital for the following cases: [10]

15,40,000
Total =
52,00,000

Total= 52,00,000

Liabilities
Share capital:
Equity Share capital
Preference share
capital

Section B

6,00,000

Balance Sheet
Amount (Rs)
Assets
4,00,000
4,00,000

Reserves

4,00,000

Debentures
Sundry Creditors
Bills Payable
TOTAL

8,00,000
4,00,000
2,00,000
26,00,000

Amount (Rs)

Fixed assets
Stock of raw
materials
Stock of finished
goods
Sundry debtors
Bank balance

10,00,000

TOTAL

26,00,000

(i) A firm issues Rs. 1,00,000 8% debenture at par with

tax rate of 60%. Calculate the cost of debt. Also
calculate the cost of debt if issued at a premium of
10% and a Discount of 10%

6,00,000
4,00,000

(ii) A firm issues 10,000, 10% preference share of

Rs.100 each. Cost of issue is Rs 2 per share. Calculate
the cost of preference capital if these shares are issued
(a) at a premium of 10% (b) at par

4,00,000
2,00,000