Working Capital Management - BU 2024 Question Paper

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UC-578

M.B.A. (Plain)/M.B.A. (Fin. Mgt./Fin./Spl.)

(Reg./EX/ATKT) Examination, 2024

(Third Semester)

(FT)

WORKING CAPITAL MANAGEMENT

FFM-2/FFF-2/Spl

[Time : 3 Hours] [Maximum Marks : 80]

Note : Attempt questions of both Sections as directed.

Section A

(Short Answer Type Questions)

Note : Attempt all questions. Each question carries 8 marks.

4×8=32

1.
Explain the components of working capital marketing.
2.
What do you mean by 'Working capital Mix'?
3.
Write the execution and formation of credit policy with an example.

A company has the following selected assets and liabilities :

	Rs.
Cash	45,000
Retained Earnings	1,60,000
Equity share capital	1,50,000
Debtors	60,000
Inventory	1,11,000
Debentures	1,00,000
Provisions for Taxation	57,000
Outstanding expenses	21,000
Land and Building	3,00,000
Goodwill	50,000
Furniture	25,000
Creditors	39,000

You are required to determine :

Gross Working Capital
Net Working Capital.

Section B

(Long Answer/Essay Type Questions)

Note : Attempt all questions. Each question carries

8 marks. 5×7=35

5.
What is the Miller model of cash management ?
6.
Explain the purpose and benefits of Inventory Management System.
7.
What do you mean by 'Working Capital sources of finance' ?
8.
A manufacturing company places a semi-annual order of 24000 units at a price of Rs. 20 per Unit. Its carrying cost is 15% and the order cost is Rs. 12 per order. Calculate, what is the most economical order quantity ?
9.
What is Working Capital Determinants ? How does it help estimating working capital requirements ?
10.
Define 5C's of accounts receivables management and explain the factors influencing size of receivables.
11.
What is the objective of working capital financing ? Define working capital financing strategy.
12.
What is Inventory Management ? Explain the techniques of inventory management.
13.
A firm that sells electronic gadgets manages stock level for such products. They adjust their inventory based on market trends, new technological advancements and product life-cycle. The business has a reordering level of 3000 refrigerators and a reorder quantity of 1500 refrigerators. The maximum lead time is 30 days and minimum is 22 days. Maximum monthly sales are 200 refrigerators and minimum sales per month is 120 refrigerators. Maximum and minimum order time 30 and 20 days respectively.
You are required to calculate :
1. Minimum level
2. Maximum level
3. Reordering level
4. Average stock level
5. Danger level.