We have the BBS 2nd Year Finance Important Questions PDF with Answers.
Also Read: BBS 2nd Year Old is Gold 2083 PDF Solution.
BBS 2nd Year Finance Important Questions PDF with Answers
Following are the BBS 2nd Year Finance Important Questions PDF with Answers.
Chapter-1: Introduction to Financial Management
Financial Management [2]
Financial management is broadly concerned with mobilization and development of funds by a business organization for efficient operation of the business. It is necessary to obtain and utilize the funds effectively.
Also Read: BBS 2nd year Fundamental of Financial Management Notes.
Profit Maximization Goal
The goal that emphasizes on maximizing the level of profit is known as the profit maximization goal. It states that the actions of a firm should be directed towards generating profit as much as possible. Decisions are in favour of earning profit.
Arguments in favor of profit maximization goal:
i. The profit maximization goal is simple, straightforward, and easy to understand.
Also Read: BBS 2nd Year Old Question Papers PDF.
ii. Profit is a good criterion for measuring the efficiency of the firm.
iii. An organization with maximum profit fulfills the interest of shareholders.
iv. Profit is a cheap source of internal financing.
v. The profit objective is a commonly applied criterion for decision-making
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Limitations of profit maximization goal:
i. Profit maximization is not a clear goal.
ii. Profit maximization ignores the risk factors.
iii. It does not consider the time value of money.
iv. It ignores the future cash flow and return.
Also Read: BBS 2nd Year Finance Question Paper 2082 PDF.
Primary Responsibilities of a corporate financial manager
a. To evaluate financing decisions.
b. To make investment decisions.
c. To analyze the financial market situation and risk
d. To coordinate and Control
e. To make appropriate dividend decisions.
Also Read: BBS 2nd Year Finance Question Paper 2081 PDF.
Finance functions performed by a financial manager
a. Financing decision
b. Investment decision
c. Working capital decision
d. Dividend decision
Also Read: BBS 2nd Year Finance Question Paper 2080 PDF.
Chapter-2: Financial Statement and Analysis
A. FINANCIAL STATEMENTS AND REPORTS
Meaning and uses of free cash flow:
The cash flow that is available for distribution to all investors (stockholders and debt holders) is called free cash flow. It is derived after making investments in different activities, like fixed assets for new products and working capital to operate the firm efficiently in the future.
Types and Importance of Financial Statements [2]:
a. Balance sheet.
b. Income statement.
c. Statement of cash flows
d. Statement of stockholders’ equity.
Information in Financial Statements:
i. Investors
ii. Trade creditors
iii. Lenders
iv. Employees
v. Government agencies
vi. Customers
vii. General public.
Basic needs for preparing cash flow statement are as follows:
The Statement of Cash Flows presents a detailed summary of all of the cash inflows and outflows during the period.
Statement of cash flows provides important insights about the liquidity and solvency of a company which are vital for survival and growth of any organization.
It enables analysts to use the information about historic cash flows for projections of future cash flows of an entity on which to base their economic decisions.
By summarizing key changes in financial position during a period, each flow statement serves to highlight priorities of management.
Comparison of cash flows of different entities helps reveal the relative quality of their earnings since cash flow information is more objective as opposed to the financial performance reflected in income statement.
Hence, these are the BBS 2nd Year Finance Important Questions PDF with Answers.
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Other Important Links
a. BBS 2nd Year All subjects Notes.
b. BBS 2nd year model questions pdf.
c. TU BBS 2nd year Syllabus & subjects.
