Nibm

National Institute of Business Management

Chennai - 020

FIRST SEMESTER EMBA/ MBA

Subject : Financial Management

Attend any 4 questions. Each question carries 25 marks

(Each answer should be of minimum 2 pages / of 300 words)

1. What are the significant factors of Financial Statements? Discuss the various tools of financial Analysis.

2. What is a Fund Flow Statement? Discuss the uses and preparation of Fund Flow Statements.

3. What is financial Forecasting? Explain.

4. Examine the various tools of Financial Analysis.

5. What is Zero Base Budgeting? Explain.

6. Describe the various aspects of Zero Based Budgeting with its merits and demerits.

25 x 4=100 marks

Question1

What are the significant factors of Financial Statements? Discuss the various tools of financial Analysis.

Answer

The following are the significant factors of financial statements:

(i) The Income Statement,

(ii) The Balance Sheet,

(iii) Statement of Retained Earnings and

(iv) Statement of changes in financial position.

The income statement measures profitability.

The balance sheet shows assets and the financing of those assets.

The statement of Retained Earnings is a connecting link between the Balance Sheet and the Income Statement.

The statement of changes in financial position, especially the cash flows indicates the change in the cash position of the firm.

TOOLS OF FINANCIAL ANALYSIS

The various tools or methods of Financial Analysis are as follows:

a) Comparative Financial Statements

Comparative financial statements are statements in which, figures for two or more periods are placed side by side for the to aide comparison. In this statement, both the Income Statement and Balance Sheet can be prepared in the form of Comparative Financial Statements. The American Institute of Certified Public Accountants explained the utility or benefit of preparing the Comparative...