End Term Examination

Subject: _____F M 2 ________________

Date: _______15 APRIL 2020_________

Name of Student: ___ANUSHKA GOEL ____

Roll No: ________201806055_____________

Batch: __________2018 - 2020____________

Evaluation

1 2 3 4 5 6 7 8 9 10 Total

Full
Marks

Marks
Obtaine
d

Faculty ___________________________________
QUESTION 1
QUESTION 2
 QUESTION 3
Genesis Ltd is analysing its performance. The CEO of the company has called for a meeting
of executives and asked the CFO to present a summary of major performance indicators the
firm including – ROI, ROE, EPS, DPS, Market Price of Share, Sales per Employee, Market
Capitalization etc. The indicators are not consistent in their indications towards profitability,
hence there is a need for a detailed discussion. The chief executives from Marketing, Finance,
Operations, as all have different indicators for their performance appraisal.

So, some of the indicators that will help in indicating the profit of the company and as the
CEO of the firm we can use these to assess the performance are -

1. Operating cash flow

2. Current ratio
3. Working capital
4. Debt to equity ratio
5. Accounts payable and receivable turnover
6. Inventory turnover
7. ROI
8. Quick ratio
9. Customer satisfaction

Styles

1.Cash management - as we know cash is the important asset for the business and whose
main motive is to manage the cash flow of the organisation and balance them. If this will be
up to the mark which may increase the performance and further profit of the company also
involve cash budget.

2. Capital structure of the company it helps in making the decisions of the firm as it is the
combination of the debt and equity and further maximises the value. It involves the levered
and unlevered firm. It will involve the approaches like net income and net operating approach
and Millars model theory

3. Working capital of the firm it is the expenses for the day to day operation Involve the gross
working capital net working capital for which both are important for the efficient working
capital. As we know that working capital is not uniform throughout as it is fluctuating and
permanent which helps in telling the nature of business, market and demand, technology,
credit policy. operating efficiency. Which may help in increasing the value of firm if
managed properly and increase the value

4. Account receivables - under this we need to see the credit policy which will involve the
standards, credit teen collection effort and account receivables depend on the volume of the
credit sale and collection period. As we know whose mam aim is to increase the value and
also maximise the shareholder wealth.

5. inventory management - it influences the operating cycle. It reserves and stock of the
material a company is manufacturing for sales and components
6. Dividend policy-as we know main objective of dividend is to maximize shareholder return
and increase value

7. Capital market- we will see the liquidity and price securities also will help in analysing the
forms of capital market efficiency which will further help in information efficiency and will
increase the value
QUESTION 4
 QUESTION 5

A convertible debenture is a type of long-term debt issued by a company that can be

converted into stock after a specified period. Convertible debentures are usually unsecured
bonds or loans meaning that there is no underlying collateral connected to the debt.

 A convertible debenture is a type of long-term debt issued by a company that has a

stock conversion option.
 Debentures are unsecured by any underlying collateral.
 Convertible debentures are hybrid products that try to strike a balance between debt
and equity.

The features of the Tata Steel convertible debenture issue are -

1. Convertible debenture is paid before shareholders in the events of a company’s

liquidation
2. It is hybrid security they offer a blend between fixed union and equity
3. Investors benefits from interest payment and have the option to convert the debentures
into equity to participate in the growth of the company
4. Holders of these debentures will receive certain percentage of interest till conversion
date and will get all rights as equity share holder after conversion.

5. Investors are paid a fixed rate while having the option to participate in a stock price
increase.

6. If the issuer's stock price declines, investors can hold the bond until maturity and
collect interest income.

7. Convertible bondholders are paid before stockholders in the event of a company's

liquidation.

Drawbacks:

1. Investors receive a lower interest rate compared to traditional bonds in exchange

for the option to convert to stock.

2. Investors could lose money if the stock price declines following the conversion
from a bond to equity.

3. Bondholders are at risk of the company defaulting and being unable to pay back
the principal.
Thank You