Question

a. Describe the differing needs for financial management at each stage of business life.

b. Describe techniques to manage short-term assets.

c. How do you calculate the value of the assets in a business?

d. Describe techniques for managing fixed assets.

e. Calculate ratios used to analyze capital investment decisions.

Answer 1

Solution A:

Financial management is extremely used at all stages from evaluation of project, for investments, for audit and post returns management, for mergers and acquisition and its due diligence , for creating balance sheets and strategy formulation, for risk management and development of controls.

Solution B

Short term assets are managed using commercial papers, assetbacked loans, repurchase agreements , letter of credit, promisionary notes. These helps organisations manage caah flow and increase inventory.

Solution C

It is calculated using Net Asset Value formula. It is taken by calculating total current market value of all assets and dividing it by total outstanding shares of the company.

Solution D:

Fixed assets are managed by various ERP software available which tracks locations, quantity, condition, maintaining requirements, depreciation status.it is effectively managed using best corporate governance framework like SOx Audit and Dodd Frank Techniques.

Solution E:

Ratios like P/E, ROi, ROE, IRR, Debt to Equity are calculated.