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৪৯তম বিসিএস ⎯ ফিন্যান্স ও ব্যাংকিং [৭১১]

পরীক্ষা৪৯তম বিসিএস ⎯ ফিন্যান্স ও ব্যাংকিং [৭১১]তারিখতারিখ অনির্ধারিতসময়16 minutes
মোট প্রশ্ন৩০
সিলেবাস
Exam 2 Topic: Corporate planning and financial management, Funds-flow analysis, Approaches to financial forecasting, Managing cash position, Management of working capital Source: Class – no 2, relevant books
প্রশ্ন দেখুনঅনুশীলন
ঘনত্ব
উত্তর
উত্তরিতবর্তমানপুনরায় দেখুনঅসম্পূর্ণ

৪৯তম বিসিএস ⎯ ফিন্যান্স ও ব্যাংকিং [৭১১]

৪৯তম বিসিএস ⎯ ফিন্যান্স ও ব্যাংকিং [৭১১] · তারিখ অনির্ধারিত · ৩০ প্রশ্ন

১.
-----------------is the process of linking a company's activities, such as marketing, manufacturing, and finance, to both internal and external environmental factors in order to develop short- to long-range plans.
  1. ক
    Corporate Planning
  2. খ
    Financial Management 
  3. গ
    Principles of Finance
  4. ঘ
    Uncertainty
সঠিক উত্তর: ক
Corporate Planning
উত্তর
সঠিক উত্তর: ক
Corporate Planning
ক
ব্যাখ্যা
Corporate financial planning is the backbone of any successful business strategy. It involves the meticulous process of forecasting, budgeting, and managing a company's financial resources to achieve its short-term and long-term goals.

Corporate planning is the process of linking a company's activities, such as marketing, manufacturing, and finance, to both internal and external environmental factors in order to develop short- to long-range plans. 

২.
Which of the following is not an element of Financial Management?
  1. ক
    Investment Decision
  2. খ
    Financing Decision
  3. গ
    Dividend Decision
  4. ঘ
    Profit Maximization
সঠিক উত্তর: ঘ
Profit Maximization
উত্তর
সঠিক উত্তর: ঘ
Profit Maximization
ঘ
ব্যাখ্যা
The scope or elements of Financial management:
  • Financial planning
  • Evaluation of alternative use of funds
  • Capital budgeting
  • Determination of cost of capital
  • Determination of the financial standard for the success of the business
  • Management of income
  • Investment decisions, including investment in fixed assets
  • Financial decisions, which relate to the raising of finance from various resources
  • Dividend decision, which involves taking a decision with regards to the net profit distribution.
৩.
Which of the following is not a factor of Dividend Decision?
  1. ক
    The portion of EPS paid to the shareholders
  2. খ
    The time
  3. গ
    Investment criteria
  4. ঘ
    The method: Cash or stock dividend or both
সঠিক উত্তর: গ
Investment criteria
উত্তর
সঠিক উত্তর: গ
Investment criteria
গ
ব্যাখ্যা
Dividend decision- The finance manager has to take decision with regards to the net profit distribution. Net profits are generally divided into two:
•Dividend for shareholders- Dividend and the rate of it has to be decided.
•Retained profits- Amount of retained profits has to be finalized which will depend upon expansion and diversification plans of the enterprise.

 

Factors

§The portion of EPS paid to the shareholders
§The time
§The method: Cash or stock dividend or both
৪.
Financial Decision-------------
  1. ক
    includes investment in fixed assets
  2. খ
    relate to the raising of finance from various resources
  3. গ
    focus on increasing income
  4. ঘ
    decision with regards to the net profit distribution.
সঠিক উত্তর: খ
relate to the raising of finance from various resources
উত্তর
সঠিক উত্তর: খ
relate to the raising of finance from various resources
খ
ব্যাখ্যা
oFinancial decisions- They relate to the raising of finance from various resources which will depend upon decision on type of source, period of financing, cost of financing and the returns thereby.

 

Factors:

§Cost
§Risk
Cash flow position
৫.
Which of the following function is not performed by a Finance Manager?
  1. ক
    Recruiting new employees
  2. খ
    Estimating the amount of capital required
  3. গ
    Determining the optimal capital structure
  4. ঘ
    Choose the best sources of funds
সঠিক উত্তর: ক
Recruiting new employees
উত্তর
সঠিক উত্তর: ক
Recruiting new employees
ক
ব্যাখ্যা
Functions of Finance manager:

1.Estimating the amount of capital required.
2.Determining the optimal capital structure
3.Choose the best sources of funds
4.Procurement(Collection) of funds
5.Utilization of funds
6.Disposal of profit
7.Management of Cash
8.Financial control(Procedures, policies, and means that help monitor and control the direction, allocation, and usage of financial resources) 
৬.
Which involves effectively managing the inflow and outflow of cash to ensure sufficient liquidity for day-to-day operations, investments, and unforeseen expenses?
  1. ক
    Financial forecasting 
  2. খ
    Funds flow analysis
  3. গ
    Managing cash position
  4. ঘ
    Dividend management
সঠিক উত্তর: গ
Managing cash position
উত্তর
সঠিক উত্তর: গ
Managing cash position
গ
ব্যাখ্যা
Cash position management plays a crucial role in the financial health and stability of businesses. It involves effectively managing the inflow and outflow of cash to ensure sufficient liquidity for day-to-day operations, investments, and unforeseen expenses.
৭.
Transaction motive ____________
  1. ক
    to pay for goods or services as it is needed for conducting everyday transactions or purchases.
  2. খ
    held for safety reasons in a balanced portfolio.
  3. গ
    a return to the holders of cash assets.
  4. ঘ
    None of the above
সঠিক উত্তর: ক
to pay for goods or services as it is needed for conducting everyday transactions or purchases.
উত্তর
সঠিক উত্তর: ক
to pay for goods or services as it is needed for conducting everyday transactions or purchases.
ক
ব্যাখ্যা

Transaction Motive: to pay for goods or services as It is needed for conducting everyday transactions or purchases.

Precautionary Motive: Cash is a relatively safe investment. Cash investments rarely lose value and are therefore held for safety reasons in a balanced portfolio.

Asset or Speculative Motive: It can provide a return to the holders of cash assets.

৮.
Current assets - current liabilities = ?
  1. ক
    Fixed income
  2. খ
    Long term capital
  3. গ
    Short term debt
  4. ঘ
    Working capital
সঠিক উত্তর: ঘ
Working capital
উত্তর
সঠিক উত্তর: ঘ
Working capital
ঘ
ব্যাখ্যা
Working capital: A part of the capital which needs to meet day to day requirements of the business. Such as, payment to creditors, salary paid to workers, purchase of raw materials etc. Hence it is also called short term capital. 

Working capital = Current assets - current liabilities.
৯.
Current assets include ___________
  1. ক
    Cash equivalent
  2. খ
    Prepaid liabilities
  3. গ
    Marketable securities
  4. ঘ
    All of the above
সঠিক উত্তর: ঘ
All of the above
উত্তর
সঠিক উত্তর: ঘ
All of the above
ঘ
ব্যাখ্যা
Current assets is an account listed on a balance sheet that shows the value of the assets owned by a company.

​​These assets can be converted to cash through liquidation, use, or sales within one year.

​Current assets include cash, cash equivalents, accounts receivable, stock inventory, marketable securities, and prepaid liabilities.

​The current assets account is important because it demonstrates a company's short-term liquidity and ability to pay its short-term obligations.
Current Assets = C + CE + I + AR + MS + PE + OLA

​where: C = Cash, CE = Cash Equivalents, I = Inventory, AR = Accounts Receivable, MS = Marketable Securities, PE = Prepaid Expenses, OLA = Other Liquid Assets​.
১০.
For negative working capital---------------
  1. ক
    Current assets > Current liabilities
  2. খ
    Current assets = Current liabilities
  3. গ
    Short term assets = Long term assets
  4. ঘ
    Current assets < Current liabilities
সঠিক উত্তর: ঘ
Current assets < Current liabilities
উত্তর
সঠিক উত্তর: ঘ
Current assets < Current liabilities
ঘ
ব্যাখ্যা
Positive working capital: Current assets exceed current liabilities. 

​Neutral working capital: Current assets are equal to current liabilities.

​Negative working capital: Current assets are less than current liabilities.
১১.
In which approach of WCM a part of fixed assets are financed from short term sources of financing?
  1. ক
    Conservative
  2. খ
    Moderate
  3. গ
    Aggressive
  4. ঘ
    None of the above
সঠিক উত্তর: গ
Aggressive
উত্তর
সঠিক উত্তর: গ
Aggressive
গ
ব্যাখ্যা

Conservative Approach: This approach tries to avoid the risk involved in financing of current assets. Here a part of working capital capital is financed from long term source.

Aggressive Approach: It is a high risk strategy of working capital financing wherein a part of fixed assets are financed from short term sources of financing.

Moderate Approach: It is also called hedging strategy which involves moderate risk and moderate profitability. In this approach fixed assets are financed from long term sources and current assets from short term sources.

১২.
 A shorter cash conversion cycle is generally considered to be------
  1. ক
    Better than a longer cash conversion cycle
  2. খ
    Worse than a longer cash conversion cycle
  3. গ
    The same as a longer cash conversion cycle
  4. ঘ
    Not relevant to a company's financial performance
সঠিক উত্তর: ক
Better than a longer cash conversion cycle
উত্তর
সঠিক উত্তর: ক
Better than a longer cash conversion cycle
ক
ব্যাখ্যা
The cash conversion cycle (CCC) is a metric that measures the amount of time it takes for a company to sell its inventory, collect receivables, and pay its bills. The shorter the cash conversion cycle, the better, and the less time cash is in accounts receivable or inventory. 

Source: Investopedia
১৩.
What is the EOQ?
  1. ক
    The average amount of inventory held in stock
  2. খ
    The minimum amount of inventory that must be kept on hand
  3. গ
    The maximum amount of inventory that can be held in stock
  4. ঘ
    The optimal order quantity that minimizes the total cost of inventory
সঠিক উত্তর: ঘ
The optimal order quantity that minimizes the total cost of inventory
উত্তর
সঠিক উত্তর: ঘ
The optimal order quantity that minimizes the total cost of inventory
ঘ
ব্যাখ্যা
• Economic Order Quantity (EOQ) is a formula businesses use to determine the ideal order size that minimizes total inventory costs, including holding, ordering, and shortage costs.

​• By using EOQ, companies can effectively manage cash flow, as it helps to minimize the amount of cash tied up in inventory, which can be reallocated for other business purposes.

​• EOQ is particularly valuable for companies with significant inventory needs, ensuring they do not overstock or run out of stock, thus maintaining customer satisfaction and preventing lost sales.

​• The formula assumes constant consumer demand and stable ordering and holding costs, which can limit its accuracy during times of fluctuating demand or variable costs.
১৪.
What is the primary goal of working capital management?
  1. ক
    Maximize profitability
  2. খ
    Minimize risk
  3. গ
    Optimize liquidity and profitability
  4. ঘ
    Maximize market share
সঠিক উত্তর: গ
Optimize liquidity and profitability
উত্তর
সঠিক উত্তর: গ
Optimize liquidity and profitability
গ
ব্যাখ্যা

WCM involves balancing having enough resources to meet short-term obligations while avoiding having too much idle capital that would be better off invested elsewhere.

• Working capital management (WCM) is used to ensure that a business has enough cash flow to meet short-term obligations and operate smoothly.
• Carefully monitoring short-term assets and liabilities can help prevent liquidity crises.
• The current and quick ratios, as well as the cash conversion cycle (CCC), help assess operational efficiency and liquidity.
• Differentiating between permanent, temporary, and reserve working capital helps companies adapt to changing market conditions.
• Effective WCM not only supports day-to-day operations but also lays the foundation for sustainable growth while reducing financial risk.

​​Source: Investopedia.

১৫.
What is the difference between gross working capital and net working capital?
  1. ক
    Gross working capital includes all current assets, while net working capital excludes current liabilities.
  2. খ
    Gross working capital is the same as net working capital.
  3. গ
    Gross working capital is the difference between current assets and current liabilities, while net working capital is the sum of current assets and current liabilities.
  4. ঘ
    Gross working capital is the total value of current assets, while net working capital is the total value of current liabilities.
সঠিক উত্তর: ক
Gross working capital includes all current assets, while net working capital excludes current liabilities.
উত্তর
সঠিক উত্তর: ক
Gross working capital includes all current assets, while net working capital excludes current liabilities.
ক
ব্যাখ্যা
Gross working capital: Gross working capital is the sum of a company's current assets (assets that are convertible to cash within a year or less).

​Net working capital: Gross working capital less current liabilities is equal to net working capital.
১৬.
A conservative working capital financing policy involves--------------------
  1. ক
    Financing a large portion of permanent working capital with short-term debt
  2. খ
    Financing a large portion of temporary working capital with short-term debt
  3. গ
    Financing a large portion of permanent working capital with long-term debt
  4. ঘ
    Financing a large portion of temporary working capital with long-term debt
সঠিক উত্তর: ঘ
Financing a large portion of temporary working capital with long-term debt
উত্তর
সঠিক উত্তর: ঘ
Financing a large portion of temporary working capital with long-term debt
ঘ
ব্যাখ্যা

• Conservative Approach: This approach tries to avoid the risk involved in financing of current assets. Here a part of working capital capital is financed from long term source.
​
​• Aggressive Approach: It is a high risk strategy of working capital financing wherein a part of fixed assets are financed from short term sources of financing.
​
​• Moderate Approach: It is also called hedging strategy which involves moderate risk and moderate profitability. In this approach fixed assets are financed from long term sources and current assets from short term sources.

১৭.
--------------helps to show whether a company can quickly pay off its short-term debts using its most liquid assets.
  1. ক
    Current Ratio
  2. খ
    Quick Ratio
  3. গ
    A/R Turnover
  4. ঘ
    A/P Turnover
সঠিক উত্তর: খ
Quick Ratio
উত্তর
সঠিক উত্তর: খ
Quick Ratio
খ
ব্যাখ্যা
  • The acid-test ratio or quick ratio helps to show whether a company can quickly pay off its short-term debts using its most liquid assets.
  • A ratio above 1.0 is generally a good sign.
  • This ratio is more conservative than the current ratio because it leaves out inventory and other assets that aren't easily converted into cash.
  • A high acid-test ratio isn't always great because it might mean that a company is sitting on too much idle cash rather than putting it to work.

    Source: Investopedia
১৮.
If a company's total current assets are $90,000 and its current liabilities are $72,000, its current ratio-----------.
  1. ক
    1.05
  2. খ
    0.75
  3. গ
    1.25
  4. ঘ
    2.00
সঠিক উত্তর: গ
1.25
উত্তর
সঠিক উত্তর: গ
1.25
গ
ব্যাখ্যা
Current ratio is $90,000/$72,000 = 1.25.
১৯.
If a company has:
​Average Inventory: $500,000
​Cost of Goods Sold: $3,000,000
​Average Accounts Receivable: $800,000
​Total Credit Sales: $5,000,000
​Average Accounts Payable: $300,000
​
​What would be its Cash Conversion Cycle (CCC)?
  1. ক
    60.83
  2. খ
    58.4
  3. গ
    36.5
  4. ঘ
    82.73
সঠিক উত্তর: ঘ
82.73
উত্তর
সঠিক উত্তর: ঘ
82.73
ঘ
ব্যাখ্যা
DIO: (500,000/3,000,000) × 365 ≈ 60.83(500,000/3,000,000) × 365 ≈ 60.83 days
DSO: (800,000/5,000,000) × 365 ≈ 58.4(800,000/5,000,000) × 365 ≈ 58.4 days
DPO: (300,000/3,000,000) × 365 ≈ 36.5(300,000/3,000,000) × 365 ≈ 36.5 days

​Then, the CCC would be:
CCC = 60.83 + 58.4 − 36.5 ≈ 82.73 days 
২০.
-----------------is a key metric that measures the average number of days a company takes to collect payment after a sale, helping to assess the efficiency of a company's cash flow management.
  1. ক
    Days Inventory Outstanding (DIO)
  2. খ
    Days Sales Outstanding (DSO)
  3. গ
    Days Payable Outstanding (DPO)
  4. ঘ
    Cash Conversion Cycle (CCC)
সঠিক উত্তর: খ
Days Sales Outstanding (DSO)
উত্তর
সঠিক উত্তর: খ
Days Sales Outstanding (DSO)
খ
ব্যাখ্যা
• Days Sales Outstanding (DSO) is a key metric that measures the average number of days a company takes to collect payment after a sale, helping to assess the efficiency of a company's cash flow management.

​• A high DSO indicates that a company is taking longer to collect its receivables, which could lead to cash flow problems, whereas a low DSO suggests efficient cash management and quicker access to cash for reinvestment.
• The DSO calculation involves dividing average accounts receivable by total credit sales over a period and multiplying by the number of days in the period, but it only considers credit sales, not cash sales.
• Tracking DSO trends over time can serve as an early warning system for potential issues in a company’s collections process or customer creditworthiness, making it a valuable tool for financial analysis.
• The usefulness of DSO is industry-specific, and it should be compared within the same industry to avoid misleading conclusions due to different business models and credit sales proportions.

​Source: Investopedia.
২১.
Working Capital Turnover measures the relationship of Working Capital with:
  1. ক
    Fixed assets
  2. খ
    Sales
  3. গ
    Purchase
  4. ঘ
    Stock
সঠিক উত্তর: খ
Sales
উত্তর
সঠিক উত্তর: খ
Sales
খ
ব্যাখ্যা
• Working capital turnover measures how effective a business is at generating sales for every dollar of working capital that's put to use.
• A higher working capital turnover ratio is better because it indicates that a company can generate a larger amount of sales.
• It could suggest that a company must raise additional capital to support future growth if working capital turnover rises too high.
• The working capital turnover indicator might be misleading when a firm's accounts payable are very high.

​Source: Investopedia
২২.
Working Capital is also known as __________ capital.
  1. ক
    Circulating
  2. খ
    Fluctuating
  3. গ
    Fixed
  4. ঘ
    going
সঠিক উত্তর: খ
Fluctuating
উত্তর
সঠিক উত্তর: খ
Fluctuating
খ
ব্যাখ্যা
• Working capital measures a company’s liquidity and short-term financial health, indicating the ability to fund operations and respond to financial stress or opportunities. Working capital is also known as fluctuating capital.

​• Negative working capital occurs when current liabilities exceed current assets, suggesting potential liquidity issues.

​• Positive working capital shows a company can support ongoing operations and invest in future growth.

​• High working capital isn’t always a good thing. It might indicate that a business has excess inventory, is not investing its excess cash, or is not taking advantage of low-cost debt opportunities.
২৩.
The ability of a firm to convert an asset to cash is called ____________:
  1. ক
    Liquidity
  2. খ
    Profitability
  3. গ
    Return 
  4. ঘ
    Marketability
সঠিক উত্তর: ক
Liquidity
উত্তর
সঠিক উত্তর: ক
Liquidity
ক
ব্যাখ্যা
• Liquidity refers to the ease with which an asset, or security, can be converted into ready cash without affecting its market price.
• The two main types of liquidity are market liquidity and accounting liquidity.
• Current, quick, and cash ratios are most commonly used to measure liquidity.
২৪.
Ordering cost is the cost of ________ materials:
  1. ক
    Purchasing
  2. খ
    Selling
  3. গ
    Stocking
  4. ঘ
    Financing
সঠিক উত্তর: ক
Purchasing
উত্তর
সঠিক উত্তর: ক
Purchasing
ক
ব্যাখ্যা
Ordering costs are the expenses associated with acquiring materials for inventory, encompassing the costs of placing and receiving orders, not just the cost of the materials themselves. These costs include various expenses related to the procurement process, such as creating purchase orders, inspecting goods, and transportation. 
২৫.
Financial Management is mainly concerned with ____________.
  1. ক
    arrangement of funds
  2. খ
    all aspects of acquiring and utilizing financial resources for firms activities
  3. গ
    efficient Management of every business.
  4. ঘ
    profit maximization
সঠিক উত্তর: খ
all aspects of acquiring and utilizing financial resources for firms activities
উত্তর
সঠিক উত্তর: খ
all aspects of acquiring and utilizing financial resources for firms activities
খ
ব্যাখ্যা
Financial management is all about monitoring, controlling, protecting, and reporting on a company's financial resources. Companies have accountants or finance teams responsible for managing their finances, including all bank transactions, loans, debts, investments, and other sources of funding.
২৬.
Working capital management is managing ____________.
  1. ক
    short term assets and liabilities
  2. খ
    long term assets
  3. গ
    long terms liabilities
  4. ঘ
    only short term assets
সঠিক উত্তর: ক
short term assets and liabilities
উত্তর
সঠিক উত্তর: ক
short term assets and liabilities
ক
ব্যাখ্যা
Working capital management is the process of overseeing and controlling a company's short-term assets and liabilities to ensure efficiency and enough liquidity to meet day-to-day expenses. Working capital management (WCM) oversees and improves a company's money, inventory, and short-term debt.
২৭.
The objective of financial management is to ______________.
  1. ক
     generate the maximum net profit.
  2. খ
    generate the maximum retained earnings.
  3. গ
    generate the maximum wealth for its shareholders
  4. ঘ
    generate maximum funds for the firm at the least cost.
সঠিক উত্তর: গ
generate the maximum wealth for its shareholders
উত্তর
সঠিক উত্তর: গ
generate the maximum wealth for its shareholders
গ
ব্যাখ্যা
Objectives of Financial Management:

Ensure regular and adequate supply of funds.
Ensure adequate returns to the shareholders which will depend upon the earning capacity, market price of the share, expectations of the shareholders.
To ensure optimum funds utilization.
To ensure safety on investment, i.e, funds should be invested in safe ventures so that adequate rate of return can be achieved.
To plan a sound capital structure - There should be sound and fair composition of capital so that a balance is maintained between debt and equity capital.
২৮.
Higher working capital usually results in:
  1. ক
    higher current ratio, higher risk, and higher profits
  2. খ
    Lower current ratio, higher risk, and profits
  3. গ
    Higher equitably, lower risk, and lower profits
  4. ঘ
    Lower equitably, lower risk, and higher profits
সঠিক উত্তর: ক
higher current ratio, higher risk, and higher profits
উত্তর
সঠিক উত্তর: ক
higher current ratio, higher risk, and higher profits
ক
ব্যাখ্যা
Higher working capital typically results in a higher current ratio, increased liquidity, and potentially higher profitability. However, it can also signal higher risk. A company with ample working capital can more easily meet its short-term obligations and potentially seize growth opportunities. 
২৯.
Financial Management aims at:
  1. ক
    Ensuring the availability of enough funds
  2. খ
    Reducing the cost of funds procured
  3. গ
    Effective deployment of funds
  4. ঘ
    All of the above
সঠিক উত্তর: ঘ
All of the above
উত্তর
সঠিক উত্তর: ঘ
All of the above
ঘ
ব্যাখ্যা
Goals or objectives of Financial Management:

Ensure regular and adequate supply of funds.
Ensure adequate returns to the shareholders which will depend upon the earning capacity, market price of the share, expectations of the shareholders.
To ensure optimum funds utilization.
To ensure safety on investment, i.e, funds should be invested in safe ventures so that adequate rate of return can be achieved.
To plan a sound capital structure - There should be sound and fair composition of capital so that a balance is maintained between debt and equity capital.
৩০.
Financial decision-making is concerned with making a following decisions:
  1. ক
     Financing Decision
  2. খ
    Investment Decision
  3. গ
    Dividend Decision
  4. ঘ
    All of these
সঠিক উত্তর: ঘ
All of these
উত্তর
সঠিক উত্তর: ঘ
All of these
ঘ
ব্যাখ্যা
Major Financial Decisions:

• Investment decisions 
• Financial decisions
• Dividend decision