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प्रश्न
Explain the following as factor affecting 'financing decision'.
Cash flow position of the business
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उत्तर
Cash flow position of the business: Debt should be opted by the company only if it has a strong cash flow position. This is because cash would be required to repay the principal along with the interest rate on the debt.
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संबंधित प्रश्न
Explain the following as factor affecting dividend decision:
Stability of earnings
Explain the following as factor affecting dividend decision:
Growth opportunities
Explain the following as factor affecting dividend decision:
Shareholder's preferences
Explain the following as factor affecting dividend decision:
Access to capital market
Explain the following as factor affecting 'financing decision'.
Level of fixed operating cost
Explain the following as factor affecting 'financing decision'.
Control consideration
Financial management is based on three broad financial decisions. What are these?
Explain the factors affecting the dividend decision.
| Ananta Ltd. is a company dealing in ready-made garments for the last many years. Recently the profit of the company has started increasing. The finance manager decided to retain the profit instead of distributing it among shareholders. |
- Identify and state the financial decision taken by the finance manager in the above case.
- State any three factors affecting the decision identified in (i) above.
|
NB Ltd. is India's largest manufacturer of cement. Its operations are spread throughout the country with 17 modern cement factories. It has a workforce of 9,000 people. Since its inception, the company has been a trendsetter in the cement industry. The company is planning to grow in the long run and wants to double its capacity in the next 3 years. For this, the Finance Manager has to decide about the quantum of finance to be raised from various long-term sources. For this, he needs to identify various available sources of funds and the proportion of funds from each source. |
- Identify the financial decision to be taken by the Finance Manager.
- State any four factors which would affect the decision identified in (i) above.
What are shareholders’ funds?
What is the nature of debt in a debt-and-equity comparison?
What is the nature of equity in a debt-and-equity comparison?
Which payment is compulsory under the borrowing terms?
Which statement about payment of dividends on equity is correct?
How does equity compare with debt regarding repayment of capital?
How does higher financial risk affect the suitability of taking on more debt?
Which sequence correctly orders the seven factors affecting financing decisions?
