cma foundation
Financing Decisions Capital Structure Question 1.Answer the following:What is Optimum Capital Structure? Explain. (Nov 2007, 2 marks)ORAnswer the following:Discuss the concept of ‘Optimál Capital Structure.” (Nov 2008, 2 marks)Answer:Capital structure is optimum when the value of the firm is maximum and Cost of capital (debts & equity) is minimum and so market price per share […]
Cost of Capital Question 1.Explain the significance of Cost of Capital. (Nov 2019, 4 marks)AnswerThe cost of capital is important to arrive at correct amount and helps the management or an investor to take an appropriate decision. The correct cost of capital helps in the following decision-making: 1. Evaluation of Investment options The estimated benefits […]
Financial Analysis and Planning Ratio Analysis Question 1.Answer the following:What is quick ratio? What does it signify? (Nov 2008, 2 marks)Answer:Quick ratio also termed as “acid test ratio” is one of the best measures of liquidity.It is worked out as follows:Quick Ratio = Quick Assets Quick liabilities In the above formula:Quick Assets = Current Assets – InventoriesQuick liabilities […]
Types of Financing Question 1.Write short notes on following:Bridge Finance. (May 2006, Nov 2011, Nov 2016, 3, 2, 2 each marks)Answer:Bridge Finance:Meaningbridge finance ¡s a short-term loan taken by a firm from commercial banks to disperse loans sanctioned by financial institutions. Importance or Need for Bridge FinanceBridge finance as the name suggests bridges the time […]
Scope and Objectives of Financial Management Question 1.Explain the two basic functions of Financial Management. (Nov 2002, Nov 2009, 3 marks)Answer:The two basic functions of F.M. are1. Procurement of funds2. Effective use of these funds 1. Procurement of fundProcurement of funds includes: Identification of sources of finance Determination of finance mix Raising of funds Division […]
Computation of Total Income and Tax Payable Question 1.State under which heads the following incomes are taxable: Rental income in case of dealer in property. Dividend on shares in case of a dealer in shares. Salary by a partner from his partnership firm. Rental income of machinery. Winnings from lotteries by a person having the […]
Advance Tax, TDS and TCS Question 1.Answer the following with reference to the provisions of the Income-tax Act, 1961 for the assessment year 2021-22:When will tax not required to be deducted at source on interest payable to a resident on any bond or security issued by a company though the aggregate amount of interest exceeds […]
Profits and Gains from Business or Profession Question 1.State with reason, whether the following statements are true, or false with regard to the provisions of the Income-tax Act, 1961 for the Assessment year 2021-22: [Nov. 2008, 2 Marks](a) Rural branches of the Cooperative banks are not allowed to claim provision for bad and doubtful debts.(b) […]
Income from House Property Introduction Question 1.Explain the concept of Municipal Value, Fair Rent and Standard Rent. Quality properties for rent Answer:Municipal ValueIt refers to the value that the Municipal Authorities deems as the value of the property for the purpose of assessment of property taxes. Fair RentIt is the rent fetched by a […]
Budget and Budgetary Control 1. Budgetary Control: It is the system of management control and accounting in which all the operations are forecasted and planned in advance to the: extent possible and the actual results compared with the forecasted and planned results. 2. Types of Budget: Capacity wise – Fixed Budget, Flexible Budget, Functions wise […]