123456789101112131415161718192021222324252627282930313233343536373839404142434445464748495051525354555657585960616263646566676869707172737475767778798081828384858687888990919293949596979899100 FINANCIAL MANAGEMENT You are welcome to Lakewood Business School Examination Portal We are delighted to have you here and wish you the very best as you embark on an exciting journey toward a rewarding career with us. Online Examinations Our online assessments are designed to evaluate your understanding of the training materials and ensure your readiness for the next step in your professional development. Here's what you need to know: Format: The assessment consists of 100 multiple-choice questions. Pass Mark: A minimum score of 50% is required to pass. Instant Results: Your answers will be automatically graded, allowing you to immediately see your results. Retake Option: If you don’t pass on your first attempt, don’t worry! You can retake the exam and try again. Need Assistance? Whether you are currently enrolled on our platform or seeking information, our dedicated support team is here to help. Feel free to reach out to us with any inquiries at admission@lwbschool.org.uk Thank you for choosing Lakewood Business School. We are committed to supporting your growth and success. 1 / 100 1. Capital employed is: D. Net sales C. Assets – debts A. Total equity + long-term liabilities B. Current liabilities 2 / 100 2. Net Present Value (NPV) is used to: D. Manage staff bonuses C. Evaluate investment profitability A. Predict inflation B. Assess inventory 3 / 100 3. A higher current ratio generally indicates: C. Better ability to pay short-term obligations B. Poor liquidity D. Higher long-term risk A. Higher leverage 4 / 100 4. Inventory turnover is calculated as: C. Cost of Goods Sold ÷ Average Inventory A. Inventory ÷ Net Sales D. Gross Profit ÷ Average Inventory B. Sales ÷ Total Assets 5 / 100 5. A financial derivative that gives the right but not the obligation to buy an asset is called: D. Swap A. Futures contract C. Option B. Forward contract 6 / 100 6. Cash flow from operating activities includes: D. Purchase of machinery C. Product sales revenue A. Loan repayments B. Dividends paid 7 / 100 7. The internal rate of return (IRR) is the discount rate at which: B. Payback is lowest A. NPV is highest D. Cost equals equity C. NPV is zero 8 / 100 8. In financial management, a hedge is used to: B. Speculate market changes A. Improve branding D. Cancel out taxes C. Minimize financial risk 9 / 100 9. The DuPont analysis helps break down: A. Liquidity ratios B. Market share D. Supplier contracts C. Return on Equity 10 / 100 10. The main objective of internal controls is to: B. Prevent errors and fraud C. Approve salaries D. Forecast depreciation A. Increase equity 11 / 100 11. What does a gearing ratio measure? D. Tax-to-income A. Marketing reach C. Debt relative to equity B. Cost per unit 12 / 100 12. Scenario analysis is used to: D. Adjust invoices C. Track audit trails B. Prepare for multiple financial outcomes A. Avoid planning 13 / 100 13. What is a credit rating used for? D. Budgeting wages A. Estimating tax B. Measuring employee risk C. Assessing creditworthiness of a borrower 14 / 100 14. Working capital management involves decisions about: A. Long-term investments B. Short-term assets and liabilities D. Product design C. Employee training 15 / 100 15. A contingency reserve is created to: D. Adjust net sales A. Buy assets C. Issue dividends B. Cover potential unexpected costs 16 / 100 16. A credit policy directly impacts: A. Inventory count D. Fixed costs C. Asset depreciation B. Cash flow and receivables 17 / 100 17. Financial planning primarily focuses on: A. Hiring strategy D. Setting employee KPIs C. Determining how much funding is needed and when B. Sales forecasting 18 / 100 18. What does a high P/E ratio suggest? D. Low stock demand C. Investors expect high growth B. Market overvaluation A. Weak earnings 19 / 100 19. What is financial forecasting? B. Predicting tax rates A. Estimating past expenses D. Measuring employee turnover C. Projecting future financial outcomes 20 / 100 20. The primary objective of portfolio diversification is to: B. Maximize leverage D. Guarantee dividends C. Minimize investment risk A. Increase taxes 21 / 100 21. The capital asset pricing model (CAPM) is used to: C. Determine required rate of return on an investment D. Audit project costs B. Measure income tax A. Price tangible assets 22 / 100 22. What is a sunk cost? B. A cost expected in the future A. A cost already incurred and not recoverable D. A cost adjusted for inflation C. A cost related to salaries 23 / 100 23. Which document shows a company’s financial performance over time? A. Balance sheet D. Ledger C. Income statement B. Bank statement 24 / 100 24. Profitability ratios assess: C. Company’s ability to generate earnings A. Capital cost D. Dividend ratio B. Expense quality 25 / 100 25. What is float in cash management? D. Lost revenue A. Extra expenses B. Net revenue C. Time difference between cash disbursement and actual withdrawal 26 / 100 26. What is the purpose of a financial feasibility study? D. File company registration C. Report HR outcomes B. Evaluate the economic viability of a project A. Draft an employee handbook 27 / 100 27. Which of the following is a key function of financial management? A. Recruitment planning C. Capital budgeting D. Market segmentation B. Inventory auditing 28 / 100 28. What is depreciation? B. Non-cash expense to allocate cost of tangible assets A. Increase in asset value C. Revenue loss D. Cash paid to vendors 29 / 100 29. A bond is a form of: A. Equity investment D. Fixed expense C. Short-term asset B. Long-term borrowing 30 / 100 30. Time value of money assumes: A. All money loses value D. Discounting is not needed B. Earlier cash flows are more valuable than future ones C. Inflation doesn’t exist 31 / 100 31. An increase in accounts receivable means: B. Reduced working capital C. Credit sales increased D. Liabilities decreased A. More immediate cash 32 / 100 32. A company is insolvent when: A. It has no debts C. Its liabilities exceed its assets D. Its staff turnover is high B. It earns no profit 33 / 100 33. One advantage of equity financing is: D. Higher debt ratios A. Regular interest payments B. Ownership dilution C. No obligation to repay funds 34 / 100 34. What is a financial covenant? D. Audit penalty B. Clause in a loan agreement restricting borrower’s actions C. Dividend reinvestment plan A. Profit-sharing agreement 35 / 100 35. Financial benchmarking involves: B. Comparing with previous financial years D. Calculating profit margin C. Comparing performance with industry standards A. Estimating wages 36 / 100 36. A low quick ratio could indicate: A. Strong profitability D. Positive working capital C. Poor short-term liquidity B. High inventory risk 37 / 100 37. A liquidity crisis means: A. High profits C. Decline in market share B. Inability to pay short-term debts D. Poor long-term growth 38 / 100 38. The accrual basis of accounting records: C. Transactions when they occur, not when cash is exchanged B. Income and expenses when cash is received D. Supplier transactions only A. Cash only 39 / 100 39. Liquidity is most closely associated with: C. Ability to meet short-term obligations B. Operating cost A. Profit margin D. Long-term investments 40 / 100 40. Preferred stock typically offers: B. Fixed dividends and priority over common stock C. High capital gains A. Voting rights only D. Non-transferability 41 / 100 41. What is meant by “diversification” in portfolio management? B. Concentrating all funds on fixed income A. Focusing on a single market C. Investing in different assets to reduce risk D. Avoiding risk calculations 42 / 100 42. Which ratio measures a company’s ability to meet short-term obligations? D. Return on equity A. Profit margin B. Asset turnover C. Current ratio 43 / 100 43. The current ratio formula is: C. Current assets / Current liabilities D. Current revenue / Current cost A. Current liabilities / Total equity B. Net assets / Current liabilities 44 / 100 44. A common size financial statement expresses items as: A. Raw figures only B. Currency differences C. Percentages of a base item D. Projections for future value 45 / 100 45. An annuity is: B. A type of loan D. A sales return A. A single payment C. A series of equal payments made at regular intervals 46 / 100 46. A treasury function manages: D. Asset depreciation B. Branding strategy C. Cash, liquidity, and risk A. Office equipment 47 / 100 47. Which activity is classified under investing in the cash flow statement? B. Repayment of loans C. Purchase of fixed assets A. Payment of dividends D. Increase in salaries 48 / 100 48. EBITDA stands for: C. Equity Balance Tax Deduction Accounting D. Enterprise Budget Income Table Adjustment B. Earnings Before Interest, Taxes, Depreciation and Amortization A. Earnings Before Income Tax Depreciation and Amortization 49 / 100 49. One disadvantage of debt financing is: C. Mandatory interest payments B. High employee turnover A. Dilution of ownership D. Reduced control 50 / 100 50. What is the formula for gross profit? C. Sales – Tax D. Net income – Dividends A. Revenue – Operating Expenses B. Sales – Cost of Goods Sold 51 / 100 51. Which is NOT a source of long-term financing? D. Debentures A. Bonds B. Equity C. Commercial paper 52 / 100 52. Capital structure decisions affect: C. Debt-equity balance of financing A. Sales forecasting D. Product pricing B. Recruitment plans 53 / 100 53. Financial leverage increases: A. Control of operations B. Risk and potential return C. Market share D. Depreciation cost 54 / 100 54. A callable bond allows: D. Unlimited dividends B. Tax exemption A. The issuer to repay before maturity C. Inflation-proof returns 55 / 100 55. The weighted average cost of capital (WACC) represents: A. Cost of debt only C. Average return required by all capital providers B. Cost of operations D. Payroll plus dividends 56 / 100 56. The primary focus of treasury management is: A. Human capital C. Cash, liquidity, and risk management D. Supplier logistics B. Investment analysis 57 / 100 57. Which of the following best describes a financial audit? C. An independent examination of financial records A. A sales campaign D. A supplier performance review B. A system of employee evaluation 58 / 100 58. Which financial statement shows a company’s financial position at a specific date? C. Budget report A. Income statement D. Balance sheet B. Cash flow statement 59 / 100 59. Retained earnings represent: A. Loan repayment B. Profits reinvested into the business C. Amount owed to vendors D. Dividends paid 60 / 100 60. When liabilities exceed assets, the company is: D. Leveraged C. Insolvent B. Profitable A. Liquid 61 / 100 61. Vertical integration affects financial planning because: C. It reduces cash flow D. It improves branding B. It adds business layers and capital needs A. It increases product sales 62 / 100 62. Free cash flow is the cash: D. Received from financing C. Saved from VAT B. Left after capital expenditures and operations A. Paid to employees 63 / 100 63. Which is a limitation of financial statements? D. Includes all company records B. Audited annually A. Historical in nature C. Prepared using Excel 64 / 100 64. Inflation affects financial management because: B. It decreases cost of borrowing C. It reduces the purchasing power of money A. It increases employee motivation D. It boosts dividends 65 / 100 65. Which one of the following is a liquidity ratio? D. Return on investment C. Quick ratio A. Debt-to-equity B. Gross margin 66 / 100 66. Which of the following is not a financing activity? D. Buying raw material A. Issuing stock B. Borrowing from a bank C. Paying dividends 67 / 100 67. The breakeven point occurs when: D. Sales double A. Profit is maximized C. Total revenue equals total cost B. Fixed costs are zero 68 / 100 68. Financial intermediaries include: C. Banks, insurance companies, and mutual funds A. Suppliers and manufacturers D. HR managers B. Wholesalers and agents 69 / 100 69. What is the primary objective of financial management? B. Tax reduction D. Shareholder wealth maximization A. Profit maximization C. Cost control 70 / 100 70. What is the primary benefit of budgeting? C. Effective resource allocation and control A. Tax deduction B. Meeting legal standards D. Profit sharing 71 / 100 71. EBIT stands for: B. Earnings Before Interest and Taxes D. Equity Before Internal Transfers A. Earnings Before Income and Taxes C. Excess Before Internal Transactions 72 / 100 72. Market risk is also referred to as: D. Operational risk A. Residual risk C. Systematic risk B. Unsystematic risk 73 / 100 73. GAAP stands for: B. Generally Accepted Accounting Principles C. Governmental Audit & Assurance Practice A. General Access Accounting Platform D. General Accounting Accuracy Policy 74 / 100 74. When preparing a financial plan, the first step is to: B. Forecast sales and revenues D. Create HR schedule C. Determine audit team A. Evaluate supplier risk 75 / 100 75. The payback period method ignores: C. Cash inflows B. Time value of money D. Breakeven volume A. Initial investment 76 / 100 76. A company with more debt than equity is said to be: B. Under-leveraged D. Liquid C. Over-capitalized Highly A. leveraged 77 / 100 77. Bookkeeping is concerned with: B. Recording day-to-day transactions A. Complex investment strategy C. Audit reports D. Tax computation 78 / 100 78. A rights issue is: B. Government-mandated equity C. New shares offered to existing shareholders D. Corporate loan repayment A. Free shares to employees 79 / 100 79. A debenture is: B. A type of unsecured loan certificate A. A form of short-term equity D. An employee bonus C. An equipment lease 80 / 100 80. Financial leverage increases when: B. Equity increases C. Debt increases relative to equity D. Cash reserves increase A. Debt decreases 81 / 100 81. Which one is NOT a financial statement? B. Income Statement A. Balance Sheet C. General Ledger D. Cash Flow Statement 82 / 100 82. A financial benchmark index is used to: D. Rate company logos A. Count inventory C. Audit taxes B. Compare a fund’s performance against the market 83 / 100 83. An overdraft facility is: D. Asset write-off A. Investment income C. Dividend payment B. Short-term borrowing from a bank 84 / 100 84. Which of the following is NOT a component of WACC? B. Cost of debt D. Inventory turnover A. Cost of equity C. Corporate tax rate 85 / 100 85. Dividend payout ratio is calculated as: D. Equity ÷ Dividends C. Net income ÷ Dividends A. Earnings ÷ Share price B. Dividends ÷ Net income 86 / 100 86. The matching principle in accounting ensures: B. Revenues and related expenses are recorded in the same period A. All sales are recorded when received C. Assets equal liabilities D. Cash is recorded immediately 87 / 100 87. A favorable budget variance indicates: D. Costs were lower than expected B. Underperformance C. Costs were higher than planned A. Overspending 88 / 100 88. What is a dividend? A. Loan given to company C. Share of profits paid to shareholders B. Bonus paid to management D. Salary to board of directors 89 / 100 89. Which of the following is NOT a money market instrument? D. Equity Shares B. Commercial Papers A. Treasury Bills C. Certificates of Deposit 90 / 100 90. Which of these is a method of capital budgeting? B. Payback period A. TCO D. FIFO C. SWOT 91 / 100 91. Horizontal analysis compares: C. Cash flows only D. Physical assets B. Past and present values over time A. Data across multiple companies 92 / 100 92. What does ROI stand for? A. Return on Inventory D. Retained Operating Income C. Return on Investment B. Revenue over Income 93 / 100 93. Liquidity ratios measure: B. Cash reserves A. Net profit D. Dividend payout C. Short-term financial stability 94 / 100 94. Which of the following is a marketable security? A. Buildings B. Land D. Patents C. Treasury bills 95 / 100 95. What is the primary purpose of a financial controller? D. Supervise customer service C. Oversee financial reporting and internal controls B. Manage day-to-day HR A. Conduct field audits 96 / 100 96. Earnings per share (EPS) is calculated by: C. Gross Profit ÷ Assets B. Net Income ÷ Outstanding Shares A. Revenue ÷ Equity D. Dividends ÷ Net Worth 97 / 100 97. What is the main advantage of using financial ratios? D. Determine market entry strategy C. Compare financial performance efficiently B. Track inventory storage A. Help in recruitment 98 / 100 98. What does the term 'amortization' usually apply to? C. Intangible assets D. Current assets B. Tangible assets A. Physical assets 99 / 100 99. A callable bond gives the issuer the right to: A. Convert it to equity D. Increase coupon rate C. Cancel dividend payments B. Redeem before maturity 100 / 100 100. What is capital budgeting? A. Preparing the payroll C. Filing tax returns D. Managing working capital B. Planning long-term investments and expenditures Your score isThe average score is 59% 0% Restart quiz By Wordpress Quiz plugin
