CBA Financial Management

Question 1

What is the primary goal of financial management in a business?

Accepted Answer

Maximize shareholder wealth

Answer

Increase employee turnover

Answer

Expand office space

Answer

Reduce product variety

Question 2

Which financial statement shows a company’s profitability over time?

Accepted Answer

Income statement

Answer

Balance sheet

Answer

Cash flow statement

Answer

Statement of changes in equity

Question 3

What does the term 'working capital' refer to?

Accepted Answer

Current assets minus current liabilities

Answer

Net income from operations

Answer

Total fixed assets

Answer

Long-term investments

Question 4

Why is budgeting important in financial management?

Accepted Answer

To manage expenses and forecast revenues

Answer

To increase taxes

Answer

To comply with HR policies

Answer

To reduce customer feedback

Question 5

Which ratio measures a company’s ability to meet short-term obligations?

Accepted Answer

Current ratio

Answer

Debt-to-equity ratio

Answer

Return on equity

Answer

Inventory turnover

Question 6

What is capital budgeting primarily used for?

Accepted Answer

Evaluating long-term investment projects

Answer

Monitoring utility bills

Answer

Approving travel expenses

Answer

Tracking weekly sales