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Financial Management
Financial Management
4. What is NPV?
It is the excess of present value of project cash inflows over that of outflows.
5. What is discounting?
It is reducing the value of future cash flows or returns to make it directly
comparable to the values at present.
CAPITAL STRUCTURE
1. What do you mean by capital structure?
It means the proportion of long term sources of finance in the capitalization of
the firm.
LEVERAGES
1. What is leverage?
It is employment of an asset or funds for which the firm pays a fixed cost or fixed
return.
WORKING CAPITAL
1. Define working capital.
Capital required to meet the day to day expenditure and purchase of raw
materials is called working capital. It is the part of capital that is directly involved in
the profitability in the business.
CASH MANAGEMENT
1. What is cash management?
It is minimizing idle cash without impairing liquidity of the firm.
8. What is EOQ?
It is the size of order that will result in the lowest total of ordering costs and
carrying cost for an item of inventory (the optimum size of an order of an item of
inventory is called EOQ).
RECEIVABLES MANAGEMENT
1. What is receivables management?
The tradeoff between costs (interest and bad debts) and benefits (increase in
profit) as a result of credit sales is known as receivable management