Financial reforms
...... is a commercial organization with a share capital divided into shares (contributions) of the founders (participants).
A business partnership
Financial resources are .....
Financial resources are the funds and assets that finance an organisation’s activities and investments.
According to its economic purpose, the main funds are divided into:
Fixed Capital
Working Capital
Which of the following is a characteristic of transnational corporations?
a) They are highly regulated by international governments
b) They are often owned and controlled by one single country
c) They have a global presence and engage in cross-border activities
c) They have a global presence and engage in cross-border activities
true/false
Financial reforms are only necessary in the aftermath of a financial crisis.
False. Financial reforms can be implemented at any time to help prevent future financial crises.
What are the two types of financial resources?
Internal financial resources
External financial resources
What is the financial cycle of fixed capital?
A) Purchase of fixed assets → Depreciation → Maintenance → Disposal
B) Purchase of raw materials → Production → Sale of finished goods → Collection of cash
C) Inventory management → Accounts receivable collection → Cash flow management
D) Purchase of fixed assets → Depreciation → Maintenance → Financing
D) Purchase of fixed assets → Depreciation → Maintenance → Financing
What are some potential benefits of transnational corporations in the context of globalization?
a) Job creation and economic growth
b) Environmental sustainability
c) Income equality among nations
d) Decreased competition in the global market
a) Job creation and economic growth
Maximum number of shareholders in Joint stock company?
There is no minimum or maximum number of shareholders
True/False
Equity financing is always the best choice for businesses that are looking to grow quickly.
False. Equity financing dilutes the control of existing shareholders, which may not be desirable for some businesses.
What is the primary difference between fixed capital and working capital?
Fixed capital refers to long-term assets that are used in the production process over multiple periods, such as machinery, equipment, and buildings. Working capital, on the other hand, refers to short-term assets that are used in the day-to-day operations of the business, such as inventory, accounts receivable, and cash.
Which of the following is NOT a characteristic of transnational corporation?
a) They have global operations and presence
b) They generate significant revenue and profits
c) They are subject to regulations and laws of each country in which they operate
d) They prioritize local interests over global interests
d) They prioritize local interests over global interests
How do publicly traded corporations differ from private enterprises in terms of financing?
C) Publicly traded corporations navigate dispersed ownership
Which type of financial resource is typically less expensive but also increases the risk of financial distress?
A) Debt financing
B) Equity financing
C) Retained earnings
D) Depreciation
A) Debt financing
Fixed capital turnover ratio is a key metric used to assess the efficiency of working capital management.
False. The fixed capital turnover ratio measures the efficiency of fixed capital utilization by evaluating how effectively a company utilizes its fixed assets to generate revenue. The working capital turnover ratio, on the other hand, focuses on the efficiency of working capital management by assessing how quickly a company converts its working capital into cash through the production and sales cycle.
How does globalization impact transnational corporations?
a) It limits their operations to one country
b) It increases their market reach and potential customer base
c) It reduces their profits and revenue
d) It makes them exempt from local laws and regulations
b) It increases their market reach and potential customer base
How can financial reforms impact the financing strategies of business entities?
B) By lowering borrowing costs
which type of financial resourse include intercompany transfers,divestitures,strategic cost management,inventory management?
Internal financial resources
What are the factors that affect the efficiency of working capital circulation?
A) Length of the production cycle, terms of trade, efficiency of inventory management practices
B) Age and condition of fixed assets, level of technology, efficiency of maintenance practices
C) Financial markets, interest rates, inflation
D) Government regulations, taxes, economic policies
A) Length of the production cycle, terms of trade, efficiency of inventory management practices
How can transnational corporations contribute to sustainable development?
a) By adopting responsible business practices and supporting local communities
b) By maximizing profits and expanding globally without considering social and environmental impacts
c) By advocating for the removal of labor and environmental regulations
a) By adopting responsible business practices and supporting local communities