MS-41   Dec-2007

MS-41 : Working capital management

1. Explain the concepts of gross and net working capital.explain how would you plan the working capital requirement af a firm in the shorl terrn ?

2. Explain the Bierman-McAdams model that helps the financial managers in funds management of a firm. Also discuss the models which guide him in deciding the process of switching funds from marketable securities to cash and vice versa.

3 a) What are lhe basic reasons for which firms hold cash and marketable securities ?

b) Describe the various factors, bath internal and external, that afiect thc flow of cash

4- Describe the system of compulsory loan component in bank credit, as enforced by the Reserve Bank of India. Discuss the salient features of a svndicated credit.

5. What are lhe methods suggested to commercial banks RBI for assessing the working capltal requiremenls of borrowers ?

6- Explain the main methods of granting credit for working capital purposes prevalent in India.

7. Liquidity of an enterprise can be studied in two ways, namely technical liquidity and operational liquidity." Discuss these two methods of liquidity measurement

in detail and also point out the differences between the two.

8. What are lhe factors that determine the liquidity position of an undertaking ? Explain the effects of liquidity on a business enterprise.

9. Wrile short notes on any four of the followins ,

{a} Statutory liquidity ratio

(b) Commitment charge

{c) Return on Assets

{d) Factoring

(e) Collateral

(f) Bill discounting