MS-041: Working Capital Management last 3 yrs paper
June, 2021
- Distinguish between the different approaches to financing working capital needs of a firm. What are the risks that a firm incurs if it violates the hedging principle? Discuss
- Describe the operating cycle and how it is determined. Discuss the various factors that influence the determination of working capital.
- (a) Discuss the different methods used by firms to recognise and manage the uncertainty associated with cash flow variations.
(b) Explain the different options available with the firm to improve its collection efficiency of cash-in-transit.
- Discuss the important features of BiermanMcAdams model and Baumol model.
- What do you mean by Discounting of Bills? Describe the procedure for discounting of bills. What are the advantages of discounting of bills?
- “Reserve Bank of India introduced a compulsory loan component in the credit granted by banks to large borrowers and issued guidelines to the banks in this regard.” Discuss the salient features of these guidelines
- Explain the significance of payables as a source of finance. Discuss the factors that influence the quantum and period of credit of payables
- Write short notes on any four of the following:
(a) Operating Profit Ratio
(b) Commercial Paper
(c) Letter of Credit
(d) Pledge
(e) Decision Tree Model
February, 2021
- What do you understand by Risk-Return Trade-off? What is its significance in financial decisions? Discuss how a finance manager ensures a proper risk-return trade-off in financial decisions. Support your answer with suitable examples.
- XYZ Ltd. sells its product on a gross margin of 20% profit on sales. For the year ending 31st December, 2018, the following information is extracted from its annual accounts:
sales (at 3 months credit) 45,00,000 Raw Materials 15,00,000 Wages (15 days in arrears) 9,60,000 Manufacturing and General expenses (one month arrears) 15,00,000 administration overheads 45,00,00 Sales Promotion expenses 2,00,00 The company enjoys one month’s credit from its suppliers of materials and maintains 3/2 months stock of raw materials and 1 month’s finished goods. Cash balance is maintained at< 1,25,000 as a precaution. Assuming 10% margin, calculate the working capital requirement of XYZ Ltd
- ‘Cash flows of the firm are affected by several factors, both internal and external.’ Discuss these factors in detail. How is cash flow forecasted?
- What do you understand by marketable securities? Why do firms hold marketable securities? Discuss the type of marketable securities classified as contingent claim securities.
- Explain the following:
(a) Procedure for discounting of bills and its advantages to a banker.
(b) Turnover method of assessing working capital needs.
- Define public deposits. Explain the different categories of Deposits and the statutory limits prescribed for each of them. Describe the procedure for Accepting and Repayment of Deposits
- What do you understand by Trade Credit? Discuss the significance and type of trade credit and the determinants and cost of such credit
- Write short notes on any four of the following:
(a) Netting
(b) Capital Investment Module
(c) Factoring of Receivables
(d) Pledge
(e) ABC Analysis
June, 2020
- What do you understand by Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR)? What is the purpose of prescribing these reserves? How does a change in these ratios affect the credit creating capacity of banks? Discuss.
- What is meant by working capital? Distinguish between gross working capital and net working capitaL Explain the components of working capital.
- While designing credit policy of a firm, what factors are taken into consideration? Discuss the attributes of the customer that are considered while deciding his credit worthiness.
- Alpha Ltd. uses three types of materials X, Y and Z for production of ‘A’ the final product. The relevant monthly data for these components is as given below:
Calculate for each component:
(a) Reorder Level
(b) Minimum Level
(c) Maximum Level
(d) Average Stock Level
- (a) Define mortgage and discuss the different kinds of mortgages.
(b) What are the non-fund based facilities provided by banks to the customers for meeting their working capital needs? Discuss.
- What do you mean by Commercial Paper (CP)? Who are permitted to issue CPs? Discuss the terms and conditions on which the CP is issued. Explain the procedures followed for issuing CP.
- Explain the concept and significance of liquidity in a business enterprise. Discuss the ratios used to measure liquidity. How are these ratios computed? Discuss.
- Write short notes on any four of the following:
(a) Payables
(b) Leading and Lagging
(c) Operating Cycle
(d) Certificates of Deposit
(e) Inter-Corporate Loans
Also view
- IGNOU Course details and sample paper link
- Sample paper of ignou for exam
- Solved Assignments of IGNOU courses
