What is the primary objective of financial management?
a) Maximizing sales revenue
b) Maximizing shareholder wealth
c) Reducing company debt
d) Minimizing operational expenses
Which of the following is a key component of financial decision-making?
a) Marketing strategies
b) Capital budgeting decisions
c) Employee training programs
d) Customer satisfaction analysis
Which financial statement provides information about a company’s profitability?
a) Balance sheet
b) Income statement
c) Cash flow statement
d) Statement of retained earnings
Capital structure decisions primarily focus on:
a) Short-term assets
b) Mix of debt and equity financing
c) Revenue generation strategies
d) Marketing and branding expenses
Which financial metric is commonly used to evaluate investment decisions?
a) Return on Investment (ROI)
b) Market share percentage
c) Employee turnover rate
d) Number of new customers
The weighted average cost of capital (WACC) represents:
a) The average return expected from all investments
b) The cost of financing a company’s assets using a mix of debt and equity
c) The company’s total revenue minus expenses
d) The percentage of capital used for operations
Which of the following is a short-term financial decision?
a) Issuing new shares
b) Choosing a supplier for raw materials
c) Investing in long-term projects
d) Acquiring another company
Which financial ratio measures a company’s ability to meet short-term obligations?
a) Price-to-Earnings (P/E) ratio
b) Current ratio
c) Earnings per Share (EPS)
d) Debt-to-Equity ratio
Which of the following is a key function of working capital management?
a) Determining the optimal level of cash, inventory, and receivables
b) Setting long-term financial goals
c) Choosing dividend policies
d) Investing in fixed assets
The time value of money concept states that:
a) A dollar received today is worth more than a dollar received in the future
b) Money loses value over time due to inflation
c) Future cash flows should be ignored in investment decisions
d) Interest rates do not impact investment choices
Which financial decision deals with dividend distribution?
a) Investment decision
b) Capital budgeting decision
c) Dividend decision
d) Capital structure decision
Which financial metric is used to measure a firm’s profitability?
a) Debt ratio
b) Net profit margin
c) Working capital
d) Current ratio
Leverage in financial management refers to:
a) The ability to generate sales
b) The use of debt financing to increase returns
c) The allocation of marketing expenses
d) The number of employees in an organization
What is the primary goal of capital budgeting?
a) Increasing employee benefits
b) Evaluating long-term investment projects
c) Expanding the marketing budget
d) Reducing daily operational costs
Which of the following is an example of a financing decision?
a) Choosing an advertising agency
b) Determining the capital structure of the firm
c) Managing daily expenses
d) Evaluating customer feedback
Which factor is most important in making investment decisions?
a) Customer preferences
b) Projected cash flows and risk assessment
c) Employee satisfaction
d) Market competition
A company with a high debt-to-equity ratio is considered:
a) Low risk
b) Highly leveraged
c) Operationally efficient
d) Overcapitalized
Which of the following is NOT a financial decision?
a) Dividend payout decision
b) Capital budgeting decision
c) Advertising strategy decision
d) Financing decision
Which method is commonly used in capital budgeting?
a) Net Present Value (NPV)
b) Customer satisfaction survey
c) Employee retention analysis
d) Market penetration strategy
Which of the following is an example of a capital investment decision?
a) Hiring new employees
b) Purchasing new machinery
c) Conducting a sales promotion
d) Offering customer discounts
A company that maintains too much cash may experience:
a) High profitability
b) Lower investment returns
c) High employee satisfaction
d) Reduced operating expenses
Which financial metric helps determine whether a company can pay its short-term debts?
a) Return on Assets (ROA)
b) Price-to-Book (P/B) ratio
c) Quick ratio
d) Earnings Before Interest and Taxes (EBIT)
A firm’s financial leverage is directly related to:
a) Debt financing
b) Marketing expenditure
c) Employee training programs
d) Customer satisfaction
