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Class 12 Financial Management worksheet

CBSE Business Studies. Investment, financing and dividend decisions, financial planning, capital structure, trading on equity with EBIT–EPS, and fixed and working capital. Every sheet has 20 questions in three sections and an answer key, and the numbers change every time.

Open a printable sample sheet

Sample questions

Real questions from this chapter, as the app sets them. Tap Answer to see the answer and working.

Section A · multiple choice

  1. 1.

    The main objective of financial management is to:

    1. minimise taxes
    2. maximise the number of employees
    3. maximise sales
    4. maximise shareholders’ wealth
    Answer

    (d) maximise shareholders’ wealth

  2. 2.

    What is meant by “financial leverage”?

    1. the proportion of debt in total capital
    2. deciding on long-term investment in fixed assets
    3. the part of profit distributed to shareholders
    4. investment in current assets
    Answer

    (a) the proportion of debt in total capital

  3. 3.

    Which of these is a investment decision?

    1. The firm decides to keep its dividend steady though profits fell.
    2. The board decides to pay no dividend this year to fund growth.
    3. The firm decides whether to buy a new machine or repair the old one.
    4. The firm decides whether to raise ₹5 crore by shares or by debentures.
    Answer

    (c) The firm decides whether to buy a new machine or repair the old one.

Section B · short answer

  1. 4.

    What is financial management?

    Answer

    Managing the flow of funds: getting the right amount of funds at the right time and cost, and using them well.

  2. 5.

    Explain each term: (a) fixed capital (b) capital budgeting

    Answer

    (a) investment in long-term assets (b) deciding on long-term investment in fixed assets

Section C · long answer

  1. 6.

    Explain the three financial decisions.

    Answer

    Investment decision (where to invest: fixed and current assets), financing decision (how to raise funds: debt or equity) and dividend decision (how much profit to distribute and how much to retain).

Fresh sheets for your child

In the app, every Financial Management sheet is new: the app remembers the questions your child has already had and leaves them out. Print the sheet as a PDF, or use notebook mode and write the answers in a notebook.

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