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 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

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

The value of money remains constant over time

Money depreciates in value at a fixed rate

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

Money has no value over time

3. What is the "cost of capital"?

The profit margin on goods sold

The cost of producing goods for sale

The total revenue generated by a company

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

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

The liquidity of a company’s assets

The efficiency of an investment in generating profit

The company's debt-to-equity ratio

The potential for future growth

5. What is the primary purpose of financial forecasting?

To determine the company’s tax liabilities

To create tax strategies for the company

To assess a company's profitability for the current year

To estimate future financial outcomes based on historical data

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

A report detailing a company’s assets and liabilities

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

A financial plan for future growth

A document that shows the company's stock price

7. What is "financial leverage"?

Increasing shareholder equity without debt

Investing profits into long-term assets

Using debt to increase the return on equity

Reducing business expenses

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

The company must repay the principal along with interest

It is a form of long-term equity investment

It requires giving up ownership in the company

It does not need to be repaid

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

Long-term bonds

Commercial paper

Shareholder equity

Retained earnings

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

Bank loans

Issuing shares to the public

Selling bonds

Short-term borrowings

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

Market value of its stock

The size of its physical assets

Company’s brand recognition

Number of employees

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

Accounts payable

Bonds payable

Wages payable

Bank overdraft

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

Depreciation

Interest payments

Rent

Wages

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

Return on Assets (ROA)

Inventory Turnover

Debt-to-Equity Ratio

Current Ratio

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

Depreciation

Dividend payments

Interest expense

Sales revenue

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

To ensure legal compliance

To maximize profits

To minimize costs

To maximize the value of the firm for its shareholders

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

The efficiency of asset management

The return on investment in long-term assets

The profitability of a company’s core operations

The total expenses as a percentage of revenue

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

Equipment

Building

Land

Cash

19. What is working capital?

The total assets of a company

The difference between current assets and current liabilities

The capital invested by shareholders

The long-term capital employed in the business

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

It involves selling a stake in the company

It provides a guaranteed return on investment

It increases the company’s liabilities

It requires repayment with interest

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

Money spent on everyday operations of the business

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

Money paid as dividends to shareholders

Money spent on advertising and promotions

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

Managing human resources

Designing marketing strategies

Making investment decisions

Ensuring that tax laws are followed

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

The current value of future cash inflows minus the investment

The total cost incurred from financing a project

The future value of all future cash flows

The total revenue generated from an investment

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

Equipment

Land

Cash

Buildings

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

The process of managing cash flow

The process of managing short-term liabilities

The process of determining tax rates

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

Page 2 of 2

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

Deciding on the inventory turnover rate

Deciding how much money to spend on marketing

Determining the balance between debt and equity financing

Determining the product pricing strategy

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

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

The profitability of a company

The proportion of assets financed by debt

The ratio of current liabilities to total liabilities

28. 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

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

Accounts payable

Bonds

Commercial paper

Bank overdraft

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

To calculate the company’s debt levels

To determine the company’s financial stability

To evaluate the efficiency of asset utilization

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

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

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

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

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

Balance sheet

Statement of retained earnings

Cash flow statement

Income statement

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

The length of time it takes to prepare financial reports

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

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

Total revenue ÷ Total expenses

Current assets ÷ Current liabilities

Net income ÷ Shareholder equity

Total assets ÷ Total liabilities

35. What is the "cash conversion cycle"?

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

The time taken to pay off creditors

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

The time it takes for the company to generate income

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

The cost of equity capital

The appropriate amount of inventory to maintain

The total market value of a company’s stock

The amount of debt financing a company should use

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

Market fluctuations in stock prices

High employee turnover

Company expansion into new markets

Increased marketing expenses

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

Current ratio

Debt-to-equity ratio

Gross profit margin

Price-to-earnings ratio

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

To prepare the company’s financial statements

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

To handle the company's marketing and sales

To manage human resources

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

The level of sales at which profits are maximized

The level of sales at which total revenue equals total costs

The point where fixed costs are fully covered

The point where total expenses exceed total revenue

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

To assess a company’s financial health and performance

To set the price for products and services

To determine how much profit a company should generate

To calculate the tax liabilities of a company

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

Sibbi MCKRU University Jobs NTS Test Preparations…
District & Sessions Court Jobs Lahore 2025 NTS Test…
NTS Latest Jobs Test Preparation online
Islamic Studies General Knowledge Online Test [Updated 2025]
Join PAF Tests Online Preparation
Pakistan Air Force Jobs 2025 Online Test Preparation
World Countries Wise GK Info Quizzes Online Test Preparation
Educators Arts & Science Written Test Online Preparation

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

Facebook Twitter Reddit WhatsApp Share via Email Print

Financial Management Basics Test Online

Financial Management Basics Test Online

Financial Management Basics Test

Related:

You Might Also Like

Mustansar Khan

Leave a Reply Cancel reply

Financial Management Basics Test Online

Financial Management Basics Test

Related:

You Might Also Like

Mustansar Khan

Your Related

Pakistan Customs Role, Functions and Laws Test Online

Income Tax Ordinance 2001 Pakistan Test Online

Federal Excise Act 2005 Pakistan Test Online

Sales Tax and Federal Excise Duty Basic Concept Test Online

Federal Board of Revenue (FBR) Function and Role Test Online

Basic Concepts of Taxation Test Online

Leave a Reply Cancel reply