Dear students get fully solved assignments
Send your semester & Specialization name to our mail id :
help.mbaassignments@gmail.com
or
Call us at : 08263069601
Master of Business Administration
Paper Code: MB FM– 204
Paper Title: Working Capital Management
Q. 1. Short answer type questions: Limit 100 – 150
Q. a. Differentiate between Gross Working Capital and Net working Capital.
Answer: Net working capital
- Qualitative in nature.
- Tells about whether company can meet its operating expenses and its current liability.
- Net working capital is result of difference between current and current liability.
- Concept used in accounting system.
- Suitable for
Q. b. Name the factors determining Working Capital.
Answer: Length of the operating cycle
The length of the operating cycle refers to the number of days taken, right from procuring material to making collections against sales from customers. This can be measured in days or months.
· Inventory management
Q. c. On what factors trade credit depends?
Answer: Trade credit is the credit extended by one trader to another for the purchase of goods and services.
The extent and pattern of trade credit within an industry depend on a number of factors, including the average rate of turnover of stock, the nature of the goods involved—e.g., their perishability—the rela
Q. d. Explain the meaning of Commercial Paper.
Answer: Commercial paper is an unsecured, short period debt tool issued by a company, usually for the finance and inventories and temporary liabilities. The maturities in this paper do not last longer than 270 days. These papers are like a promissory note allotted at a huge cost and exchangeable between the All-India Financial Institutions (FIs) and Primary Dealers (PDs).
Most of the
Q. e. Discuss the factors determining the investment in inventory
Answer: Level Of Safety Stock
If a firm maintains high level of safety stock because of relatively larger degree of uncertainty associated to production and sales, the size of investment in inventories is also higher.
Q f. How would you estimate the recorder level?
Answer: In management accounting, reorder level (or reorder point) is the inventory level at which a company would place a new order or start a new manufacturing run.
Reorder level depends on a company’s work-order lead time and its demand during that time and whether the company maintain a safety stock. Work-order lead time is the time the company’s suppliers take in
Q. g. Whatis the objective of management of receivables?
Answer: Receivables are amounts owed to the company by the customers to who company sell goods or services in the normal course of business. The main purpose of managing receivables is to meet competition and to increase sales and profits. Receivable management is a process of managing the account receivables within a business organisation. Account receivables
Q. h. How credit analysis is done?
Answer: Stages in the Credit Analysis Process
The credit analysis process is a lengthy one, lasting from a few weeks to months. It starts from the information-collection stage up to the decision-making stage when the lender decides whether to approve the loan application and, if approved, how much credit to extend to the borrower.
The following are the key stages in the credit analysis process:
Q. i. What are the functions of Cash Management?
Answer: Cash Management
Cash management is also known as treasury management, refers to the process of collection, management, and usage of cash flows for the purpose of maintaining a decent level of liquidity, and it involves financial instruments such as treasury bills, certificate of deposit, and money market funds making the same substance for not just individuals but organizations too.
Functions of Cash Management
- Inventory Management
Q. j. Explain the motives for holding cash.
Answer: C ash is known as most liquid and less productive assets of a firm. Cash management means optimal cash maintain in a business. If an excess is taken in a business, it is harmful because it does not grow profit. Contrary if the cash is taken deficit position them the liquidity crises exists. It is a key component of a company’s financial stability and solvency.
Q.2 what do you understand by working capital? Explain the concept and determinants of Working Capital.
Answer: Concept of Working Capital:
The funds invested in current assets are termed as working capital. It is the fund that is needed to run the day-to-day operations. It circulates in the business like the blood circulates in a living body. Generally, working capital refers to the current assets of a company that are changed from one form to another in the ordinary course of business, i.e. from cash to inventory, inventory to work in progress (WIP), WIP to finished goods,
Q.3 what is factoring? Discuss the types and benefits of factoring.
Answer: What is Factoring?
Factoring is a financial technique where a specialized firm (factor) purchases from the clients accounts receivables that result from the sales of goods or services to customers. In this way, the customer of the client firm becomes the debtor of the factor and has to fulfil its obligations towards the factor directly.
The factoring agreement usually assumes
Q.4 what do you mean by Receivable Management? How will you control the investment in Receivables? Explain.
Answer: Receivable management is a process of managing the account receivables within a business organisation. Account receivables simply mean credit extended by the company to its customers and are treated as liquid assets. It involves taking decisions regarding the investment to be made in trade debtors by organisation. Deciding the proper amount be lent by the company to its customers in the form of credit sales is quite important. It affects the overall cash availability for undertaking various operations.
Q.5 Discuss the management problems involved in the planning and control of cash. Explain the Importance of cash budgets main tool of cash planning.
Answer: Here are several cash management problems and solutions you can take towards them.
1. Too High of Overhead
One of the biggest worries any business owner has is the neverending task of staying on-pace with the demand for your product.
Out of fear, owners will invest too heavily in things such as too high rent, too many laptops/desktops, and other utilities you may find in a common workplace.
Q.6 Write short notes on :
a. Public deposits.
Answer: Public Deposits
One of the important sources of finance to trading and manufacturing companies in India has been public deposits. Generally companies opt for this method of financing rather than debenture or debt financing since they offer attractive rates of interest.
Advantages of Public Deposits
Companies find the public deposits as an
b. Marketable Securities
Answer: Marketable securities are unrestricted short-term financial instruments that are issued either for equity securities or for debt securities of a publicly listed company. The issuing company creates these instruments for the express purpose of raising funds to further finance business activities and expansion. Governments also issue debt securities of this type in the form of T-bills, used for funding of public projects and expenditures.
c. ABC Analysis
Answer: Every single item we order does not have equal value. Some parts cost more. Some are used more frequently. Some are both. ABC inventory analysis helps categorize those items so we can understand which ones should receive our full attention.
As the name suggests, this inventory categorization technique groups your inventory in three buckets: A, B, & C.
- A’ items are the most important to an organization. This material should receive your full focus due to its high usage rate or a high price (or both
Dear students get fully solved assignments
Send your semester & Specialization name to our mail id :
help.mbaassignments@gmail.com
or
Call us at : 08263069601