Financial Management Important Questions For CBSE Class 12 Business Studies Meaning, Role and Objectives of Financial Management
1.Meaning of Financial Management
main
2.Definition of Financial Management
objectives
3.Importance of Financial Management
of
financial
management
4.Objectives of Financial Management
are:
(i)
Ensuring
availability
Previous Year Examination Questions
1 Mark Questions
1.Define financial management. (Foreign 2014; All India 2011)
Ans. According to Weston and Brighan, ‘Financial management is an area of financial decision-making harmonising individual motives and enterprise’s goals’.
2.What is the primary objective of financial management? (Delhi 2013)
Ans . The primary aim of financial management is to maximise shareholders’ wealth.
3 Marks Questions
3.Wealth maximisation is the primary objective of financial management. Explain.(Compartment 2014)
or
What is meant by financial management? State the primary objective of financial management. (All India 2012; Delhi 2012)
or
Explain the meaning and objective of financial management. (Delhi 2010)
or
State the objectives of financial management.(Delhi 2009)
or
What do you understand by the term ‘financial management’? What is the objective of financial management? (Delhi 2009 c)
Ans . Financial management is concerned with optimal procurement as well as the usage of finance. For optimal procurement, different available sources of finance are identified and compared in terms of their costs and associated risks.
of
funds
at
reasonable
cost.
4.Sound financial management is the key to the prosperity of business. Explain.(HOTS; All India 2009)
or
Explain, how does proper financial management helps in the growth of business?(All India 2009)
Ans . Sound financial management is the key to the prosperity of business because of the following advantages: (Any three)
(ii)
Effective
utilisation
of
4/5 Marks Questions
5.Give the meaning of Investment and financing decisions of financial management. (All India 2014)
Ans. Investment decisions It involves careful selection of assets in which funds are to be invested. Decisions, relating to investment in fixed assets are known as capital budgeting, whereas those concerning investment in current assets are called working capital decisions. A business needs to invest funds for setting up new business, for expansion and modernisation. Investment decision is taken after careful scrutiny of available alternatives in terms of costs involved and expected return. These decisions are crucial in nature due to following reasons:
funds.
(iii)
Safety
Financing decisions It is concerned with the decisions of how much funds are to be raised from which long-term source, i.e. by means of shareholders’ funds or borrowed funds.
of
6.Explain the concept and the objective of financial management. (All India 2013)
Ans .Concept of financial management
funds
by
creating
reserves
and
reinvestment
Important Questions for Class 12 Business Studies Class 12 Business Studies NCERT Solutions Home Page
