Full Marks – 80
Time – Three Hours
The figures in the margin indicate full marks for the questions.
1. (a) What are the important functions of financial management? Are they interrelated? If so, how?
(b) Should business operate strictly in shareholders best for the welfare of society at large? Explain.
2. (a) Justify that the Du-Pont system of financial control is a modified from of financial analysis.
(b) What is debt service coverage ratio? The following figures are extracted from the financial statements of a company. Compute the debt service coverage ratio.
Profit after tax
Interest on term loans
Term loan installment
3. (a) Explain the features that are generally related to the rights and claim of ordinary shareholders.
(b) What is convertible debenture? State the pros and cons of financing by convertible debentures in India.
4. (a) A firm offers its terms for supply of materials as 2/10 net 30. This means that a 2% discount is given if payment is made within 10 days of the invoice date and the full invoice amount is due and payable within 30 days if the discount is not taken. Calculate the cost of trade credit to the customer firm in the above case.
(b) What is the advantages and disadvantages of factoring from the view point of the client firm?
5. (a) What do you mean by Swaps? Explain the various kind of swaps.
(b) Explain the functions, players and components of derivatives.