WORKING CAPITAL MANAGEMENT AND FINANCE-I
CHAPTER- 11
Review Questions...
A. OBJECTIVE TYPE AND MULTIPLE CHOICE QUESTIONS
1. Fill in the gaps :
(i) Net working capital is the excess of _______ over _______
(ii) Working Capital is also known as _______ or ________ capital.
(iii) The gaps working capital is a _______ concern concept.
(iv) The rate of return on investments _______ with the shortage of working capital.
(v) Greater the size of a business unit ________ will be the requirements of working capital.
[Ans- (i) Current Assets, Current Liabilities; (ii) revolving circulating; (iii) going; (iv) Larger]
2. State whether the following statements are true of false.
(i) Gross working capital refers to the capital invested in the total assets of an enterprise.
(ii) Net working capital is the excess of current liabilities over current assets.
(iii) Every business concern should have excessive working capital.
(iv) Longer the process period of manufacture, larger is the amount of working capital required.
(v) The fixed proportion of working capital should be generally financed from the fixed capital sources.
(vi) Commercial banks provide loans for working capital.
[Ans- (i) False; (ii)False; (iii) False; (iv) True; (v) True; (vi) True.]
3. Select the most appropriate answer:
Gross working capital is the capital investment in:
(a) Total current assets of the enterprise.
(b) Current assets minus current liabilities.
(c) Positive current assets.
[Ans- (a)]
4. Select the most appropriate answer.:
On the basis of concept, working capital may be classified as:
(a) Regular working capital and reserve working capital.
(b) Gross working capital and net working capital.
(c) Permanent working capital and temporary working capital.
(d) Seasonal working capital and special working capital.
[Ans- (b)]
B. SHORT ANSWER TYPE QUESTIONS
1. What is the concept of working capital ?
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2. Name the various kinds of working capital.
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3. What do you mean by gross working capital ?
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4. What is net working capital ?
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5. Explain the term net working capital in 2-3 sentences.
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6. Give any four sources of short-term working capital.
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7. What is meant by aggressive approach to financing of working capital ?
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8. What is meant by factoring.
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9. What do you understand by operating cycle concept of working capital ?
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10. Give any five factors determining working capital requirements.
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11. Write a short note on the importance of working capital.
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12. What are the kinds of working capital ?
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13. What is the need for working capital ?
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14. What is the hedging approach to financing mix ?
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15. What is zero working capital approach ?
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16. Write a short note on risk-return trade off.
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17. Write importance of working capital.
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C. LONG ANSWER TYPE QUESTIONS
1. Define the term working capital. What factors would you take into consideration in estimating the working capital needs of a concern ?
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2. What do you understand by working capital ? Explain the concepts of working capital ?
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3. What is working capital ? On the formation of a new business, what considerations are taken into account in estimating the amount of working capital needed ?
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4. Explain various factors influencing working capital.
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5. Describe the need and determinants of working capital in a business.
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6. Discuss the importance of working capital for a manufacturing concern.
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7. What are the advantages of adequate working capital ?
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8. What shall be the repercussions if a firm has (a) Redundant working capital (b) Inadequate working capital ?
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9. What factors would you take into consideration in estimating the working capital needs of a concern ?
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10. What is the importance of working capital in a business ?
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11. What is meant by working capital ? What are the determinants of working capital needs of an enterprise.
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12. Explain what is meant by 'Working Capital'. As a management consultant, you are required to state the considerations involved in estimating the amount of the required working capital.
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13. What is meant by working capital management ? What are determinants of working capital needs of an enterprise ?
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14. Explain various sources of short-term working capital finance.
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15. Discuss the various approaches to determine an appropriate financing mix of working capital.
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16. Discuss the various sources for financing working capital in terms of costs, liquidity, flexibility and control.
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17. Define the term working capital ? describe the need and determinants of working capital in a business.
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Questions Type By- Janmoni Hazarika
