Practicing Success

Target Exam

CUET

Subject

Business Studies

Chapter

Financial Management

Question:

Read the following case study and answer question.

Aninjey is a CEO of Alfa Ltd. He is running a shoe business where his company is manufacturing canvas shoes, made up of breathable t-shirt fabric. His business is having a good liquidity position. He has already issued 200 equity shares earlier and has a company policy of paying regular dividends to its shareholders. He wants to expand his business and for that he required "100 crores. He asked his Finance Manager to prepare a financial blueprint Of the same in order 10 have the right debt-equity ratio, so that a right financial balance can be maintained.

"Finance Manager is asked to prepare a financial blueprint." Identify the financial concept discussed above.

Options:

Dividend decision

Financing decision

Investment decision

Financial Planning

Correct Answer:

Financial Planning

Explanation:

The correct answer is option (4) : Financial Planning

The term 'financial planning' refers to assessment of financial requirements and arranging the sources of capital.

The finance manager gets entire information about his firm;s activities and on that basis, he prepares a financial plan

The financial plan so prepared becomes crucial with respect decision making.