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Introduction to Business Dersi 8. Ünite Sorularla Öğrenelim

Managing Financial Resources

1. Soru

What are Business finance decisions related to?

Cevap

Business finance decisions are related to the resources of a business and they can be grouped as investment decisions, financing decisions and operating decisions.


2. Soru

How can the main sources of finance for companies be grouped ?

Cevap

The main sources of finance for companies can be grouped as:

• Internal Funds

• External funds


3. Soru

What does the combination of internal funds and external funds create ?

Cevap

The combination of internal funds and external funds creates the financing
structure, in other words the capital structure of the company.


4. Soru

What are financial markets?

Cevap

Financial markets are institutions and procedures which facilitate the transfer
of funds through financial transactions involving financial claims.


5. Soru

What are the functions of Financial Markets?

Cevap

• Efficient allocation of capital

• Price discovery

• Liquidity

• Risk Sharing


6. Soru

What do money markets include?

Cevap

Money markets include short-term securities like commercial paper and
treasury bills


7. Soru

What can working capital be financed by?

Cevap

Working capital can be financed by:
• Accrued wages and salaries,
• Accrued taxes,
• Short-term loans provided from commercial banks, finance companies or factors,
• Issuing


8. Soru

What is the feature of ''Pro forma income statement''?

Cevap

Pro forma income statement exhibits forecasted revenues and expenses for a
future period.


9. Soru

What is the feature of ''Pro forma balance sheet''?

Cevap

Pro forma balance sheet displays forecasted assets and total financing provided by debt and equity financing at a future date.


10. Soru

How do companies usually finance their long-term assets?

Cevap

Companies usually finance their long-term assets with long-term resources such as long-term trade credit extended by their suppliers, long-term leasing, long-term bank loans, or by issuing bonds or stocks.


11. Soru

What is ''Capital lease''?

Cevap

Capital lease is a lease agreement by which the lessee rents the property and
makes regular payments to the lessor for a specified number of months or years.


12. Soru

What is ''Preferred stock''?

Cevap

Preferred stock is a hybrid security.


13. Soru

What does ''The capital budgeting process'' involve?

Cevap

The capital budgeting process involves economic analysis and selection of projects according to some criteria determined by the management of the company


14. Soru

How can Investment decisions be grouped ?

Cevap

Investment decisions can be grouped as:
1. Assessing the profitability of a single investment project.
2. Assessing the relative profitability of competing investment projects.
3. Selecting the best investment projects in a
portfolio of projects with a limited budget.


15. Soru

What is the relationship between risk and return?

Cevap

There is a positive relationship between risk and return. Investors will not be willing to assume additional risk unless they expect to be compensated with additional return.


16. Soru

How can basic types of risk for a business be classified ?

Cevap

Basic types of risk for a business can be classified as:

• Credit risk (Default risk)

The risk that a company or individual will not be able to pay the contractual interest or principal on its debt obligations.

• Market risk

The risk that the value of an investment to fluctuate due to general market conditions.

• Political risk

The risk that a country’s government will suddenly change its policies.

• Operational risk

Various risks that can arise from a company’s ordinary business


17. Soru

What does Investment Portfolio include?

Cevap

Government bonds, Stocks, Corporate bonds


18. Soru

Who can the Shareholder value be improved with?

Cevap

Shareholder value can be improved with the help of Chief Risk Officer
(CRO).


19. Soru

What is the role of financial decisions in creating shareholder value ?

Cevap

We can analyze the role of financial decisions in creating shareholder value by grouping them under different aspects.

-Investing aspect of value creation

-Financing aspect of value creation

-Operating aspect of value creation


20. Soru

What is Economic Profit or Economic Value Added (EVA) ?

Cevap

Economic Profit or Economic Value Added (EVA) is a form of economic profit


21. Soru

What do Capital Markets Board of Turkey’s Corporate Governance Principles consist?

Cevap

Capital Markets Board of Turkey’s Corporate Governance Principles consist of four main sections, namely

shareholders,

disclosure and transparency,

stakeholders and board of directors


22. Soru

What are the main stakeholders of the business ?

Cevap

The main stakeholders of the business are customers, suppliers, employees,
environment, government, competitors, investors and the society.


23. Soru

What do the implementation of internal controls involve ?

Cevap

To fight against fraud and corruption, companies can establish internal control systems. Typically, implementation of internal controls involve the following steps:

• Identification of possible internal and external threats,
• Identification of internal processes,
• Identification of process gaps using control assessment tools,
• Implementing internal controls to fill gaps with strong control processes,
• Testing the controls with an early warning system.


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