SUBJECT CODE: BHM307 EXAM DATE: 21.11.2016
FM/NOV/ODD/16-17/02/NC Page 1 of 4
ROLL No…………….
NATIONAL COUNCIL FOR HOTEL MANAGEMENT
AND CATERING TECHNOLOGY, NOIDA
ACADEMIC YEAR 2016-2017
COURSE 5th Semester of 3-year B.Sc. in H&HA
SUBJECT Financial Management
TIME ALLOWED 03 Hours MAX. MARKS: 100

(Marks allotted to each question are given in brackets)

Q.1. Explain the objectives and functions of financial management.
OR
How is the finance function organised? What are the functions that finance
department performs in a large organisation?

Q.2. Define capital structure. Explain the principles, while forming the capital structure
of the organisation.
OR
Define working capital. What factors would you take into consideration in
estimating the working capital needs of a budget hotel?

Q.3. Explain ratio analysis types with the help of a chart and its importance.
OR
Write short notes on:
Over capitalisation
Indifference point
Comparative and common size income statements

Q.4. Write short notes on:
Payback period
Cash flow statements
Average rate of return
Profit maximisation
(4x2 ½
SUBJECT CODE: BHM307 EXAM DATE: 21.11.2016
FM/NOV/ODD/16-17/02/NC Page 2 of 4
Q.5. Balance Sheet of a company as on 31.12.2010 is as follows:
Liabilities 2009 2010 Assets 2009 2010
Share capital Fixed assets
Retained earnings Stock
Premium on shares Bills receivable
Accumulated depreciation Pre-paid expenses
Debentures Cash balance
Accounts payable Commission on
shares

TOTAL:
Additional information:
Net income for the year Rs.1,40,000/-
Fixed assets purchases was made during the year at a cost of
Rs.1,65,000/- and fully depreciated machinery costing Rs.40,000/-
Depreciation for the year Rs.20,000/-
Income tax paid was Rs.40,000/-
You are required to prepare:
A statement of schedule of changes in working capital
Sources and application of funds

Q.6. A project cost Rs.25,000/-. The net profits before depreciation and tax, and tax
rate 20% for the five years. Following are the expected cash flows to be:
Year Project
1
2
3
4
5
You are required to calculate payback period.

SUBJECT CODE: BHM307 EXAM DATE: 21.11.2016
FM/NOV/ODD/16-17/02/NC Page 3 of 4
Q.7. From the following information, prepare comparative balance sheet and give your
interpretations:
Liabilities 2000
Amount
in Rs.
2001
Amount
in Rs.
Assets 2000
Amount
in Rs.
2001
Amount
in Rs.
Share Capital Land Building
Reserves and surplus Plant
Debentures Furniture
Loan Other fixed assets
Bills payable Cash and Bank
Sundry creditors Bills receivable
Current liabilities Sundry debtors
Stock
Pre-paid expenses
TOTAL: TOTAL:

Q.8. A company has to choose one of the following two mutually exclusive projects
A&B. Project A requires Rs.20,000/- and Project B requires Rs.15,000/- as initial
investment. The firms cost of capital is 10%. Suggest which project should be
accepted under NPV method. Following are the net cash flows:
Q.8. A company has to choose one of following two mutually exclusive projects A B. Project A
requires Rs.20,000/- and Project B requires Rs.15,000/- as initial investment. The firms cost of
capital is 10%. Suggest which project should be accepted under NPV method, the given are
net cash flows as follows:
Year 1 2 3 4 5
Project A 4200 4800 7000 8000 4000
Project B 4200 4500 4000 5000 4000
Calculate: net present value
Present value Rs.1/- 10% (discount factor) using present value tables
Year 1 Year 2 Year 3 Year 4 Year 5
.909 .826 .751 .683 .621

Q.9. Tyre manufacturing company has drawn up the following profit and loss account
for the year ended:
Calculate:
Gross Profit Ratio
Net Profit Ratio
SUBJECT CODE: BHM307 EXAM DATE: 21.11.2016
FM/NOV/ODD/16-17/02/NC Page 4 of 4
Operating Ratio
Operating Profit Ratio
Particulars Rs. Particulars Rs.
To opening stock By Sales
To purchases By Closing Stock
To wages
To manufacturing expenses
To gross profit c/d

To selling distribution expenses By gross profit b/d
To administrative expenses By commission received
To value of furniture lost by fire
To general expenses
To net profit c/d


Q.10. Fill in the blanks:
Expenditure incurred on research is an example of
(Deferred revenue expenditure/partly capital
expenditure.
Capital structure means the pattern of in the firm (capital
employed/dividend).
Capital budgeting is related to (sales/capital expenditure).
Quick assets current assets (minus) (debtors/stock).
Depreciation means reduction in the value of due to usage
and efflux of time (current assets/fixed assets).