Vardhman Mahaveer Open University, 2010 december question paper
Papers (A) (December) 2010
(458)
A
DAM-04
D.A.M. EXAMINATION, December, 2010
WORKING CAPITAL MANAGEMENT
Paper-DAM-04
(Working Capital Management)
Time allowed : Three hours
Maximum marks : 100
Attempt any five questions. Each
question carries equal marks.
1. What is 'working capital ? On the formation of a new
business, what considerations are taken into account in
estimating the amount of working capital required ?
2. Following is the Balance Sheet of M.Ltd. as on
31st March, 2010 :
Liabilities Rs. Assets Rs.
Equity share capital 2,00,000
P &L A/c 20,000
Debentures 80,000
Sundry creditors 50,000
Provision for Taxation 10,000
3,60,000 3,60,000
Calculate the following ratios :
(i) Current ratio
(ii) Quick ratio
(iii) Solvency ratio
(iv) Proprietary ratio
3. The weekly use of material X is as follows :
Re-order quantity - 2,000 units
Maximum delivery period - 7 weeks
Average delivery period - 6 weeks
Average consumption - 850 units
Maximum consumption - 800 units
You are required to calculate :
(i) Re-order level quantity
(ii) Minimum level
(iii) Maximum level
(iv) Average stock level
4. What do you understand by Receivables Management ?
Explain its objectives.
5. What are the methods used for estimating working capital
requirements ? Give description in detail.
6. Describe the various sources of short-term finance.
7. Explain clearly the meaning of cash management and the
principal motives for holding cash and liquid assets.
8. From the following particulars prepare a statement of
working capital required to finance a level of activity of
6,000 units of output per annum :
Analysis of selling price per unit: Rs.
Raw materials 10
Labour 06
Overhead 04
20
Profit 04
Selling price 24
Additional information :
(i) Raw materials are to remain in store on an average
1 month.
(ii) Materials are in process on an average 2 months.
(iii) Finish goods are in stock on an average 3 months.
(iv) Credit allowed to debtors is 4 months.
(v) Credit allowed by suppliers is 2 months.
It may be assumed that production and overheads accrue
evenly throughout the year.
9. Describe various methods of Banks Finance and Security
required in Bank Finance.
10. Explain in detail short-term Integrated Funds Planning
Model.
Papers (A) (December) 2010
(458)
A
DAM-04
D.A.M. EXAMINATION, December, 2010
WORKING CAPITAL MANAGEMENT
Paper-DAM-04
(Working Capital Management)
Time allowed : Three hours
Maximum marks : 100
Attempt any five questions. Each
question carries equal marks.
1. What is 'working capital ? On the formation of a new
business, what considerations are taken into account in
estimating the amount of working capital required ?
2. Following is the Balance Sheet of M.Ltd. as on
31st March, 2010 :
Liabilities Rs. Assets Rs.
Equity share capital 2,00,000
P &L A/c 20,000
Debentures 80,000
Sundry creditors 50,000
Provision for Taxation 10,000
3,60,000 3,60,000
Calculate the following ratios :
(i) Current ratio
(ii) Quick ratio
(iii) Solvency ratio
(iv) Proprietary ratio
3. The weekly use of material X is as follows :
Re-order quantity - 2,000 units
Maximum delivery period - 7 weeks
Average delivery period - 6 weeks
Average consumption - 850 units
Maximum consumption - 800 units
You are required to calculate :
(i) Re-order level quantity
(ii) Minimum level
(iii) Maximum level
(iv) Average stock level
4. What do you understand by Receivables Management ?
Explain its objectives.
5. What are the methods used for estimating working capital
requirements ? Give description in detail.
6. Describe the various sources of short-term finance.
7. Explain clearly the meaning of cash management and the
principal motives for holding cash and liquid assets.
8. From the following particulars prepare a statement of
working capital required to finance a level of activity of
6,000 units of output per annum :
Analysis of selling price per unit: Rs.
Raw materials 10
Labour 06
Overhead 04
20
Profit 04
Selling price 24
Additional information :
(i) Raw materials are to remain in store on an average
1 month.
(ii) Materials are in process on an average 2 months.
(iii) Finish goods are in stock on an average 3 months.
(iv) Credit allowed to debtors is 4 months.
(v) Credit allowed by suppliers is 2 months.
It may be assumed that production and overheads accrue
evenly throughout the year.
9. Describe various methods of Banks Finance and Security
required in Bank Finance.
10. Explain in detail short-term Integrated Funds Planning
Model.
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