Home/FBR/Financial Management Basics Test Online

Financial Management Basics Test Online

Mustansar KhanLast Updated: July 8, 2025

Financial Management Basics Test Online

Financial Management Basics Test

Total Questions:	41
Time Allowed:	20 Minutes
Total Marks:	41
How to Attempt Test:	Please choose the right Option in MCQ-type question.
Test Helpful For:	FBR Sub Inspector Test Customs Inspector Test FBR Interviews FBR Sepoy Test Preparation for Customs and Tax Related Questions

Please wait...

Page 1 of 2

1. Which of the following is considered a "liquid" asset?

Building

Land

Equipment

Cash

2. What is the "cash conversion cycle"?

The time it takes for the company to generate income

The period between the acquisition of raw materials and the sale of finished goods

The time taken to convert cash into inventory and back into cash through sales

The time taken to pay off creditors

3. What is the "cost of capital"?

The cost incurred by a company to obtain funds, including both equity and debt

The profit margin on goods sold

The total revenue generated by a company

The cost of producing goods for sale

4. What is the "net present value" (NPV) in capital budgeting?

The total cost incurred from financing a project

The current value of future cash inflows minus the investment

The total revenue generated from an investment

The future value of all future cash flows

5. Which of the following is considered a current asset?

Land

Cash

Equipment

Buildings

6. Which of the following is a purpose of conducting a financial analysis?

To calculate the tax liabilities of a company

To set the price for products and services

To determine how much profit a company should generate

To assess a company’s financial health and performance

7. Which of the following financial ratios measures a company’s profitability?

Debt-to-Equity Ratio

Return on Assets (ROA)

Inventory Turnover

Current Ratio

8. Which of the following is a typical indicator of a company’s financial performance?

Number of employees

Company’s brand recognition

The size of its physical assets

Market value of its stock

9. Which of the following is an example of a long-term liability?

Bank overdraft

Bonds payable

Wages payable

Accounts payable

10. What does the debt-to-equity ratio measure?

The ratio of current liabilities to total liabilities

The proportion of assets financed by debt

The proportion of a company's capital that comes from equity

The profitability of a company

11. What is working capital?

The difference between current assets and current liabilities

The capital invested by shareholders

The long-term capital employed in the business

The total assets of a company

12. Which of the following is a key characteristic of debt financing?

It requires giving up ownership in the company

The company must repay the principal along with interest

It does not need to be repaid

It is a form of long-term equity investment

13. What is the primary role of a financial manager in a company?

To handle the company's marketing and sales

To decide how to allocate funds in the business to maximize shareholder value

To prepare the company’s financial statements

To manage human resources

14. What does the "return on investment" (ROI) measure?

The efficiency of an investment in generating profit

The company's debt-to-equity ratio

The potential for future growth

The liquidity of a company’s assets

15. What does the "capital asset pricing model" (CAPM) help determine in financial management?

The amount of debt financing a company should use

The total market value of a company’s stock

The appropriate amount of inventory to maintain

The cost of equity capital

16. What does the "operating margin" measure in financial management?

The total expenses as a percentage of revenue

The return on investment in long-term assets

The profitability of a company’s core operations

The efficiency of asset management

17. What is the main purpose of the "profitability" ratio in financial management?

To measure the company’s ability to generate profits from its resources

To calculate the company’s debt levels

To determine the company’s financial stability

To evaluate the efficiency of asset utilization

18. What is "financial leverage"?

Reducing business expenses

Increasing shareholder equity without debt

Using debt to increase the return on equity

Investing profits into long-term assets

19. Which of the following best defines "capital expenditure"?

Money spent on advertising and promotions

Money paid as dividends to shareholders

Money spent on purchasing long-term assets, such as property or machinery

Money spent on everyday operations of the business

20. Which of the following is a financial management activity related to capital structure?

Determining the balance between debt and equity financing

Deciding how much money to spend on marketing

Deciding on the inventory turnover rate

Determining the product pricing strategy

21. What is the "time horizon" in financial planning?

The period over which liabilities are to be settled

The expected period of profitability for a business

The period over which financial resources are expected to be used or invested

The length of time it takes to prepare financial reports

22. Which of the following is a characteristic of a "highly leveraged" company?

The company has a high proportion of debt compared to equity

The company has minimal debt

The company has a large amount of equity financing

The company relies mostly on retained earnings

23. Which of the following is a key function of financial management?

Making investment decisions

Ensuring that tax laws are followed

Designing marketing strategies

Managing human resources

24. What is the formula for calculating the current ratio?

Total assets ÷ Total liabilities

Total revenue ÷ Total expenses

Current assets ÷ Current liabilities

Net income ÷ Shareholder equity

25. Which of the following is a type of financial statement that shows the company’s financial position at a specific point in time?

Statement of retained earnings

Income statement

Balance sheet

Cash flow statement

Page 2 of 2

26. What does the term "capital budgeting" refer to?

The process of determining tax rates

The process of managing short-term liabilities

The process of deciding where to invest in long-term assets

The process of managing cash flow

27. What does "liquidity" refer to in financial management?

The company’s ability to pay short-term obligations with its available assets

The company’s ability to raise capital from investors

The company's ability to generate profits

The company’s ability to manage its long-term debt

28. What does the "break-even point" refer to in financial management?

The level of sales at which total revenue equals total costs

The point where total expenses exceed total revenue

The level of sales at which profits are maximized

The point where fixed costs are fully covered

29. Which of the following is an example of a short-term financing source?

Long-term bonds

Shareholder equity

Commercial paper

Retained earnings

30. What does the "time value of money" principle state?

Money depreciates in value at a fixed rate

Money has no value over time

The value of money remains constant over time

Money received today is worth more than the same amount received in the future

31. Which of the following is an example of a non-cash expense?

Sales revenue

Interest expense

Depreciation

Dividend payments

32. Which of the following best describes an "income statement"?

A financial plan for future growth

A statement showing the revenue, expenses, and profit of a company over a period

A document that shows the company's stock price

A report detailing a company’s assets and liabilities

33. Which financial ratio measures the ability of a company to meet its short-term obligations?

Price-to-earnings ratio

Current ratio

Debt-to-equity ratio

Gross profit margin

34. Which of the following is a characteristic of "equity financing"?

It provides a guaranteed return on investment

It increases the company’s liabilities

It involves selling a stake in the company

It requires repayment with interest

35. Which of the following is a characteristic of "diversification" in financial management?

Focusing on a single investment to maximize returns

Reducing the company’s debt levels

Increasing the company’s short-term liabilities

Spreading investments across different assets to reduce risk

36. Which of the following is an example of a financial risk?

Increased marketing expenses

Company expansion into new markets

High employee turnover

Market fluctuations in stock prices

37. Which of the following is a source of long-term financing?

Bank overdraft

Accounts payable

Bonds

Commercial paper

38. Which of the following is an example of a "non-cash" expense?

Rent

Wages

Depreciation

Interest payments

39. Which of the following is an example of equity financing?

Issuing shares to the public

Bank loans

Short-term borrowings

Selling bonds

40. What is the primary purpose of financial forecasting?

To determine the company’s tax liabilities

To estimate future financial outcomes based on historical data

To assess a company's profitability for the current year

To create tax strategies for the company

41. Which of the following is the primary objective of financial management?

To maximize profits

To minimize costs

To ensure legal compliance

To maximize the value of the firm for its shareholders

You Can Learn and Gain more Knowledge through our Online Quiz and Testing system Just Search your desired Preparation subject at Gotest.

Basic Concepts of Taxation Test Online
Federal Board of Revenue (FBR) Function and Role Test Online
Pakistan Customs Role, Functions and Laws Test Online
Sales Tax and Federal Excise Duty Basic Concept Test Online
Key Economic Terms Test Online (Basic Economic Indicators)
Fiscal Policy of Pakistan Test Online
Tax Administration and Reforms in Pakistan Test Online
Sales Tax Act 1990 Pakistan Test Online
Federal Excise Act 2005 Pakistan Test Online
Income Tax Ordinance 2001 Pakistan Test Online

Mustansar KhanLast Updated: July 8, 2025

Financial Management Basics Test Online

Financial Management Basics Test Online

Financial Management Basics Test

Related Posts

Mustansar Khan

Leave a Reply Cancel reply