1. a) What do you understand by capitalization of earning? How is the value of a firm ascertained with the help of its earnings? Explain with an example.
b) What do you understand by the ‘net worth’ of a company? I- low is it different from the owners’ equity? What items comprise the net worth? Is dividend policy connected with the net worth in any way? Explain.
2. Explain the important determinants of the Working Capital needs of a firm. Can two firms with different Working Capital achieve the same amount of sales? If so, explain how?
3. What is the importance of preparing cash flow statement for a business organization? Discuss the various sources of cash flows and explain the concept of cash cycle.
4. What do you understand by Capital Structure Planning? Explain the various determinants of the capital structure of a company.
5. Discuss the concept and significance of ‘Budgetary Control’. Explain briefly different types of budgets that are prepared in a business organization.