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Airtel

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Submitted By pjbevinakatti
Words 667
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3 marks:
1. What is current assets policy? State the policies related to current asstes management.
2. State the matching approach concept of working capital policy.
3. What do you understand by the cost trade-off?
4. State the difference between pledge and mortgage?
5. What is optimal conversion size/amount?
6. What are short costs?
7. what is cash cycle?
8. State the difference between bank overdraft and cash credit.
9. Briefly explain the modes of security of bank financing.
7 marks:
10. Explain the various types of bank finances available for working capital management.
11. Compute maximum bank borrowings permissible under method I, II and III of Tandon committee norms from the following figures and comment each method:
Current liabilities In lacs Current assets In lacs
Creditors for purchases
Other current liabilities

Bank borrowings 200
100
300
400 Raw material
Work in progress
Finished goods
Receivables
Other current assets 400
40
180
100
20 700 740
Assume core current assets at ` 190 lacs.
12. Briefly explain the impact of risk-return trade off on the level of current assts.
13. What are the objectives of cash management?
14.

Compute the current ratio for all three policies.
16. From the following information, prepare cash budget of a business firm for the month of April. (a) The firm makes 20 per cent cash sales. Credit sales are collected 40, 30 and 25 per cent in the month of sales, month after and second month after sales, respectively. The remaining 5 per cent becomes bad debts. (b) The firm has a policy of buying enough goods each month to maintain its inventory at two and one-half times the following month’s budgeted sales. (c) The firm is entitled to 2 per cent discount on all its purchases if bills are paid within 15 days and the firm avails of all such discounts. Monthly purchases are made in two

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