EXAM PAPER

Financial Analysis

Financial Analysis

2)

a) The basic idea as far as controlling of the budget is concerned is to make sure that tthere is a certain plan in place as far a budgetary expenses are concerned. Another main reason to allocated budget is to make sure that there is a certain time frame for the expenses and the due objectives that are needed to be maintained are also prepared keeping in mind prospect budget control. Another idea as far as far as controlling of the budget is concerned is to make sure that that proposed budgetary control can be taken care of. Some other motives for budget control are:

1) Profit Maximization

2) Measurement of the performance of the business

3) Economy

4) Knowing the weaknesses in operations of business.

b) The management of the working capital is really important for an organization as it is necessary to maintain a certain balance. Excess working capital indicates that there are operating inefficiencies that are creeping up in the business. When organization is trying to find that balance, in actuality it is making an attempt to make sure that it increases the profitability and increases the liquidity. Managers use the working capital to make sure that they are in a place to find manage the everyday expenses and to make sure that the operations of the organization are running well. If the management of working capital is not taken care of the chances are that it will deter the financial health of the organization.

3)

a) Share Issues

It is a term that is used more commonly in finance to show what is the quantity of the shares that are being issues by the corporation. Shares that are being allocated and after they have been issues, they have been held by their shareholders. Issuance and allocation is also creation of new share.

b) Liquidity Ratios

These are the class of the financial ratios that are put together to illustrate the ability of the company to pay off some of its short term obligations. Greater the value of these ratios, the safer the organization is as far as its ability to cover the short term debt is concerned.

c) Role of Central Bank

The most important function of the central bank is to manage and take care of the aggregate supply of money and monetary instruments in the economy. Money supply is managed through managing the interest rates, and also ...