Financial
Management
Q1. "The
credit policy of a company is criticized, because the bad debt losses have
increased considerably and the collection period has also increased".
Discuss under what conditions this criticism may not be justified.
Q2. Is the adjustment
of time relatively more important for financial decisions with short-range
implications or for decisions with long-range implications? Justify your answer
with suitable examples.
Q3. If the
use of financial leverage magnifies the earnings per share under favourable
economic conditions, why do companies not employ very large amount of debt in
their capital structure. Illustrate your answer by giving justification.
Q4. "The
analysis of debt to equity ratios alone can be decreasing and an analysis of
the magnitude and stability of cash flows relative to fixed changes is
extremely important in determining the appropriate capital structure" give
your opinion.
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