holiday home work 2018-19 class xii business … · survey through questionnaire prepare a...
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HOLIDAY HOME WORK 2018-19
CLASS XII
BUSINESS STUDIES
INSTRUCTIONS
1. THE HOLIDAY HOME WORK DIVIDED INTO TWO PARTS
A. PROJECT WORK TO BE DONE IN PROJECT FILES
B. ASSIGNMENT TO BE DONE IN HOME WORK COPY.
DATE OF SUBMISSION-5 JULY 2018
A. PROJECT WORK
One project on any of the FOUR topics:
1. The total length of the project will be of 25 to 30 pages.
2. The project should be handwritten.
3. The project should be presented in a neat folder
Project Title: Marketing Management
1. Introduction
1.1. About the project
1.2. Objective of the Project
1.3. Research Methodology
1.4. Survey through Questionnaire
Prepare a questionnaire of about 15-20 questions
1.5. About the Company ( History, Growth, Financial, etc…)
1.6. Competitive brands
List at least 5 competitive brands with figure and special features and
price
1.7. License and Registration requirements if any for you
product
2. Product Mix
2.1. About your product
2.2. Key features of your product
2.3. Key ingredients of your product
2.4. Range of your product
2.5. Branding
2.5.1. Name
2.5.2. Logo
2.5.3. Tagline
2.6. Labelling
2.7. Packaging (variety)
2.8. Unique Selling Proposition (USP) of your Product
3. Price
3.1. Selling price of your product
3.1.1. To Consumer
3.1.2. To Retailer
3.1.3. To Wholesaler
4. Promotion Mix
4.1. Advertisement (Media & Budget)
4.2. Sales Promotion
4.2.1. Scheme for consumer
4.2.2. Scheme for Retailer
4.2.3. Scheme for wholesaler
5. Place
5.1. Distribution Channel (with reasons)
5.2. Means of Transportation
5.3. Decision Relation to Warehouse
5.4. Integration of production and distribution process
6. Cost effective techniques followed by you as compare to
competitors
7. Conclusion
8. Reference
8.1. Websites
8.2. Books
Project Title: Stock Exchange
9. Introduction
9.1. About the project
9.2. Objective of the Project
9.3. Research Methodology
10. Business Finance
10.1. Sources of Business Finance
10.2. Financial Market
10.3. Money Market
10.4. Capital Market
10.5. Primary Market (IPO)
10.6. Secondary Market
11. Importance / Functions of Stock Exchange
12. Development of Stock Exchange in India
12.1. History
12.2. Bombay Stock Exchange (With Figure of BSE)
12.2.1. Market Segment
12.3. National Stock Exchange(With Figure of NSE)
12.3.1. Market Segment
12.4. SENSEX
12.4.1. Meaning
12.4.2. Table of Constituents
Sl. No. Name of Company Sector Market
Capitalisation
1
12.5. NIFTY
12.5.1. Meaning
12.5.2. Table of Constituents
Sl. No. Name of Company Sector Market
Capitalisation
1
12.6. Leading Global Staci Indices ( NASDAQ, S & P 500, Dow
Jones Industrial Average, FTSE 100, NIKKI 225, Sanghai composite,
HenSeng, SGX Nifty)
13. Trading Procedure
14. Settlement Procedure
15. Trading Time
16. Trading Holidays
17. List of some companies listed In Stock Exchange(at least 25
shares)
Sl. No. Company Name Sector Stock
Exchange
Current Market
Price
1
18. Portfolio (Purchase share of 5 companies and invest Rs. 50,000)
18.1. Date of creation
On 25th Nov. 2014 I have created a portfolio of the following shares;
18.2. Name of Company with sector (area of business)
19. Price movement of portfolio shares
19.1. Company 1 (for one month starting from Nov. 25) Table and graph
Date Previous
Close
Open
price
High Price Low Price Close
Price
Nov 25
19.2. Company 2 (for one month starting from Nov. 25)
Table
Graph (date and closing price)
19.3. Company 3 (for one month starting from Nov. 25)
Table
Graph (date and closing price)
19.4. Company 4 (for one month starting from Nov. 25)
Table
Graph (date and closing price)
19.5. Company 5 (for one month starting from Nov. 25)
Table
Graph (date and closing price)
20. Sale of Portfolio
Date of sale: After 30 days
Stock
Name
Quantity
Purchased
Purchase
Price per
share
Total
Investment
amount
Selling
price per
share
Value of
Investment on
sale date
Net Gain /
Loss
1 In Amount
In
Percentage
21. Analysis and conclusion
21.1. Reasons for fluctuation of price
21.2. Conclusion
22. References
22.1. Websites (List all websites you have visited)
22.2. Books
Project Title: Principle of Management
(Big Bazaar / McDonald / Domino’s)
23. Introduction
23.1. About the project
23.2. Objective of the Project
23.3. Research Methodology
23.4. Prepare a questionnaire of about 10 to 15 questions, to asked
to various members of the orgainsation
24. About the company of your study
24.1.1. History & Growth
24.1.2. Business Interest
24.1.3. Product offered
24.1.4. Give picture and figure etc with above
25. Various principle of Henry Fayol
25.1. About Henry Fayol
25.2. Explain all principles of management one by one
25.2.1. Meaning
25.2.2. Positive Effect
25.2.3. Adverse effects of Violation
25.2.4. Applicability of this principle
25.3. Finally make a table to show your observation
Sl. No. Name of Principle Applicable Not-
Applicable
26. conclusion
27. References
27.1. Websites (List all websites you have visited)
27.2. Books
Project Title: Effects of Business Environment on Indian Soft Drinks
Industry
28. Introduction
28.1. About the project
28.2. Objective of the Project
28.3. Research Methodology
28.4. About the soft drinks markets
29. Participants of Indian soft Drink Industry
29.1. From Sixties to Nineties
29.1.1. History
29.1.2. Details of all participants
29.1.3. Their In and Out of Indian market
29.2. From 1991 onwards
Writes notes on all important event and introduction of products
29.3. Competitive brands in the Industry
List at least 5 competitive brands with figure and special features, taste
etc.
30. Impact of Business Environment
30.1. Introduction Paragraph
30.2. Economic Environment (With Photograph and graph if any)
30.3. Social Environment (With Photograph and graph if any)
30.4. Impact of Technological Environment (With Photograph and
graph if any)
30.5. Legal Environment (With Photograph and graph if any)
31. Environmental Factors
32. Conclusion
33. Reference
33.1. Websites
33.2. Books
34. Changes witnessed over the last few years on mode of packaging
and its economical. The changes in transportation of fruits and
vegetables such as cardboard
35. Milk being supplied in glass bottles , later in plastic bags and now in
tetrapack and through vending machines.
36. Plastic furniture [doors and stools] gaining preference over wooden
furniture.
37. The origin of cardboard and the various stages of changes and
growth.
38. Brown paper bags packing to recycled paper bags to plastic bags
and cloth
39. Re use of packaging [bottles, jars and tins] to attract customers for
their product
40. The concept of pyramid packaging for milk.
41. Cost being borne by the consumer/manufacturer.
42. Packaging used as means of advertisement
ASSIGNMENT -1
Nature and significance of management
Q.1 “Planning, Organising, Staffing, Directing and Controlling” is the sequence of
functions in a process. Name it. (Management) (1)
Q.2 Production Manager of Kavya Ltd. tries to produce goods with minimum cost.
Name the concept which is being focussed by management. (Efficiency) (1)
Q.3 In order to be successful, an organization must change it according to the
needs of the environment which characteristic of management is highlighted in
the statement? (Dynamic) (1)
Q.4 Which force binds all other functions of management? (Coordination) (1)
Q.5 Radhika Ltd. uses environment friendly methods of production. Identify the
objective it is trying to achieve. (social objectives) (1)
Q.6 Your uncle is serving as a foreman in a factory. At what level of management
is he working? (Lower Level) (1)
Q.7 Why is it said that “management is a goal oriented process”? (Because it
helps in achieving organisational goals by unity of efforts. (1)
Q.8 Identify the nature of management when it is practiced as personalised
application of existing knowledge to achieve desired results. (Management is an
art) (1)
Q.9 “Success of an organisation largely depends upon its management” Explain
any five reasons to fortify the above statement. (Any five points of importance)
(1)
Q.10 The General manager- GM of ‘RadhaswamiKidswear Limited’, Mr.
SahilRadhaswami, has divided all the employees of his company into three levels
(Top Level, Middle level and Lower Level) different individuals. At the Top Level
the General Manager and Board of Directors themselves work. The Middle Level
work is looked after by the four Departmental managers like the Production
Manager, Purchase manager, Sales Manager and Finance Manager. The Lower
Level is constituted of one supervisor of each of the four departments. These
Supervisors look after the daily activities of their subordinates. They also
maintained the flow of inputs in the production process to transform it to desired
output. Often, it is observed that the managers of all Levels remain busy
sometimes with the planning of their respective departments and sometimes with
the comparison of the desired and actual results. Similarly, sometimes they are
busy with the Recruitment, Selection and Training of the employees and
sometimes with their motivation. Mr. Sahil knows it very well that the job of
management cannot be done by a single person alone, but when all join hands to
work together the meaning of management is realised. This is why he makes all
his efforts to effect coordination in the activities of all his employees. All the
employees are working with the team spirit. In the above paragraph features of
management have been described. Identify them by quoting the relevant lines
and explain them.
((i) Continuous process (ii) Group activities (iii) pervasive (iv) Intangible force (v)
Multi-dimensional. (5)
Assignment-2
NATURE AND SIGNIFICANCE OF MANAGEMENT
1)“Management increases efficiency.” How
2) Name the levels of Management engaged in:
a) Overseeing the activities of workers
b) Taking key decisions
.
3)“A manager applies his knowledge of Management in his own way.” What aspect of the nature of Management does this statement indicate?
4)A supervisor is able to achieve the monthly production target of 5000 units, but at a higher cost. Is he efficient or effective.
5) “Management is not a perfect science.” Explain.
6) Dominos Pizzas‟ keep introducing new variety of Pizzas in its menu. Which
characteristics of Management are presents this act?
7) “In an organization, employees are happy and satisfied, there is no chaos and the
effect of Management is noticeable.” Which characteristic of Management is highlighted
by this statement?
8) There is no restriction on anyone being appointed or designated as a manager of any
business enterprise. Which aspect of management as a profession does this statement
indicate.
9)Amit enterprises use environment friendly techniques of production . Identify the
objective it is trying to achieve
.
10Approva feels that management is required in all kinds of organization whereas surbhi argues that management is not required in non business organizations like schools, hospitals and clubs, who is correct and why?
ASSIGNMENT -3
NATURE AND SIGNIFICANCE OF MANAGEMENT
Application Based Question Q1. Mr. X, the director of a company many times get involved in activities like
procurement of raw material, production and dispatch of goods, employee discipline etc.
(a) Name the level of management Mr. X belongs to.
(b) Do you think he must be involved in such activities? Give reason.
(c) Give two important functions, Mr. X must perform?
[Hint : (a) Top level (b) No, as these are routine jobs (c) setting goals, formulating
objectives etc.]
Q2. Management of Global Ltd. fulfills all its objectives and the organization is able to
work effectively and efficiently. It is using environment friendly methods of production
and disposes off the waste material by either recycling it or using the same for landfill in
such a manner that aquatic life is not disturbed. It also provides employment
opportunities to the disadvantaged sections of the society.
(a) Identify the objective of management which the company is fulfilling by doing such
activities.
(b) State any other 2 objectives which they should fulfill?
(c) Which two values is the company achieving by their activities?
Q3. In ABC Ltd., the purchase department purchased 20 tones of raw material for
production department. Although only 15 tonnes was needed by production
department. Due to this, goods were overproduced and were not accepted by sales
department. As a result, some goods remained unsold. Which aspect of management is
lacking among various
departments. Give any 2 importances of the above asked element. [Hint : (a) Co-
ordination]
Q4. The marketing manager of Alpha Ltd. fixed the target for all his sales executives
and gave them all the possible authorities to achieve it. They were asked to submit to
him their performance report at the end of the month. All of them did the same. On the
receipt of report, the expected and actual results of sales executives were compared, on
this basis future course of action was decided. The sales Executive also wrote in their
report what the expectations of the customers from the company were. Majority of them
had written that they wanted the co. to cooperate in the construction of Dharmsala going
on in the city. The marketing manager placed this demand before the Board of
Directors. This was happily accepted.
(a) Identify the functions of management described in above paragraph by quoting
relevant lines.
(b) Which 2 values are given to society?
(c) Which objective is being highlighted here?
[Hint : (a) Organising, Controlling and Planning],
(b) Community development, Accomplishment of social responsibility]
(c) Social Objective
Q5. Three groups of employees of Ganga Ltd. are working at different posts. The first
group is responsible for survival and growth of organisation. This group continuously
keeps a watch over the business environment. With a view of coping with the changes
going on in the business environment this group immediately discusses the change to
be brought about in
company‟s plan. The second group is to explain the policies by superiors to the
employees and developing the feeling of cooperation among all the departments. The
Third group is responsible for maintaining quality and safety standards and minimizing
wastage.
(a) Identify the levels of management described in above paragraph
by quoting relevant lines. [Hint : (a) Top level (b) Middle level (c) Supervisory level.]
Q6. Grey Ltd. is facing a lot of problems these days. The Co‟s margin is declining day
by day. The Production manager is blaming marketing department whereas marketing
is blaming production department for not maintaining the quality. Finance department is
blaming the both.
(a) What aspect of management do you think is lacking in the above situation.
(b) Give the importance of that concept.
[Hint : Co-ordination]
Q7. Rahul is planning to launch a new line of products in 2 years time. However at
present he has reduced its prices by 10% to retain its existing customers. What are the
2 main objectives he is focusing at? Give reason. [Hint : (1) Growth - by launching a
new product line
(2) Survival - by reducing prices]
Q8. After every three months, Mr. Ramakant offers new schemes to its distributors. He
tries to bring in changes keeping in mind the needs of a customer and offers from his
competitors. This gives him an edge over his competitors. Identify the characteristic of
management in above situation? Explain it briefly. [Hint : Dynamic].
Q9. Toys & toys Ltd. received a new order of 10,000 toys to be delivered in 15 days,
failing which the contract will be null and avoid. To complete this Mr. Pankaj, production
manager planned to outsource the production and deliver the order on time. The
outsourcing of production results in increase in cost by 30%. Do you think the
production manager performed
his duties effectively and efficiently? Give reasons. [Hint : Effective but not efficient.]
Q10. Gemini Circus is organising shows internationally for the last thirty years. Their
shows have been successful across the globe. Of late, their shows are not as popular
as they were in the past. After analysing, they are thinking of bringing necessary
changes in their shows to gain popularity.
(a) Identify which characteristics of management is reflected in above situation? Give
reasons.
(b) Which function of management is indicated here [Hint : (a) Dynamic and Goal
oriented.
(b) Planning and Controlling.
Q 11. Ford Motors aims to produce and sell 1,50,000 cars in 2014. To achieve this
target the production department strives for timely production and sales department
takes all possible steps to sell them. Due to combined efforts of all the departments,
company can achieve its target.
(a) Which importance of management is highlighted here? Explain any two other
significances of management.
(b) Which other aspect of management helps in achieving goal in Ford Motors.
[Hint : (a) “Management helps in achieving group goals
(a) Co-ordination.]
ASSIGNMENT 4
Chapter 9– Financial Management
Financial Planning:
It is the process of estimating the fund requirements of the business and
specify the sources of funds.
It is essentially preparation of a financial blueprint of and organization’s future
operations to ensure that enough funds are available at the right time.
It forecasts the growth, performance, investment and requirement of funds in
the future and decide the quantum and timing of funds.
Twin objectives of financial management:
1. To ensure availability of funds whenever required
2. To see that the firms do not raise funds unnecessarily.
Importance of financial planning:
1. Prepares to face the future
2. Avoids business shocks and surprises
3. Helps in coordination of business functions
4. It helps reduce wastage, duplication of efforts, and gaps in planning
5. It tries to link the present with the future
6. It helps to link the investment and dividend decisions on a continuous basis
7. Financial evaluation of actual performance
S.No. Question Answer (summarized form)
1. Why is Financial Planning done?
2. “Itrelates to the estimation of funds required to be invested, raising sources of funds for the purpose of investments & taking decisions relating to distribution of profit.” Name the concept being referred here in the above statement.
3. Give one importance of financial planning.
4. What is meant by ‘Financial Planning’? State any two points of its importance.
5. Which process prepared a blue print of an organization’s future preparations relating to finance? Give any two reasons why this process is needed?
6. “Financial Planning tries to link the present with the future.” Explain the importance of financial Planning in the light of this statement.
7. “Financial Planning is a financial blueprint of an organization’s future operations.” Explain the twin objectives of Financial Planning in the light of this statement.
8. To avoid the problem of shortage and surplus of funds what is required in financial management? Name the concept and explain its any three points of importance.
9. What is required to tackle the uncertainty in respect of availability and timings of funds? Name the concept involved and explain any three points of its importance.
10. Name the process which helps in determining the objectives, policies, procedures, programmes and budgets to deal with the financial activities of a an enterprise. Explain its three points of importance.
11. To tackle the uncertainty in respect of availability and timings of funds what is required? Name the concept and explain its any three points of importance.
ASSIGNMENT 5
FINANCIAL MANAGEMENT
Capital Structure
Break up of capital into debt and equity or composition of capital ]
It refers to the mix between owners and borrowed funds
It can be calculated as Debt/Equity.
Difference between Debt and Equity
1. Cost of debt is lower than the cost of equity
2. Debt is more risky for a business as compared to equity.
Financial Risk
Refers to the risk of default or a chance that the firm will be unable to meet
its fixed payment obligations. (interest, preference dividend, repayment of
capital)
Risk increases if there is too much debt
Optimal Capital Structure
A capital structure is said to be optimal when the proportion of debt and equity is
such that it results in an increase in the value of equity share or maximization of
the wealth of shareholders.
Trading on Equity or Financial Leverage:
It refers to the increase in profits earned by the equity shareholders due to
the presence of fixed financial charges like debt in the capital structure.
Favourable financial leverage refers to a situation when – with higher use
of debt
Difference between rate of return and cost of debt increases the earnings
per share (EPS)
Hence companies employ more of cheaper debt to enhance their EPS.
Assumption of trading on equity:
- The rate of return on investment is higher than the cost of debt
- Interest paid is tax deductible
Factors affecting the choice of capital structure:
(i) Cash Flow Position (ii) Interest Coverage Ratio (iii) Debt Service
Coverage Ratio
(iv) Return on Investment (v) Cost of debt (vi) Tax Rate
(vii) cost of equity (viii) Floatation cost (ix) Risk
Consideration
(x) Flexibility (xi) Control (xii) Regulatory
framework
(xiii) Stock market reaction (xiv) capital structure of other companies
S.No. Question Answer (summarized form)
1. Name the concept which increases the return on equity shares with a charge in the capital structure of a company.
2. ‘Cost of debt is lower than the cost of ‘Equity Share Capital’. Give reason why even then a company cannot work only with debt?
3. Which structure relates to the proportion of Debt and Equity used for financing the operations of business?
4. Which source of funds consists of less legal formality?
5. Which source of funds consists of more legal formality?
6. Which kind of source involves high floatation costs?
7. Which source of finance is cheaper to raise?
8. How is existing management’s control over the business diluted?
9. Which source of finance should a company prefer to gain freedom of operation?
10. Which source of funds do the investors prefer during depressive conditions in the financial markets?
11. Which source of funds do the investors prefer during boom periods in the financial markets?
12. How does high tax rate make the debt a cheaper source of finance?
13. Determining the overall cost of capital and the financial risk of the enterprise is affected by many factors. Explain any five such factors.
14. What does trading on equity refer to?
15. When trading on equity is possible in a company?
16. How do the equity shareholders gain due to existence of debt component in the capital structure?
If the return on capital employed is more than the prevailing rate of interest, the company is left with the higher surplus of profits after paying fixed amount of interest year to year which raises earning per equity share and hence equity shareholders stand benefitted.
17. Which component of capital employed determines ‘Financial Risk’?
18. What is capital structure?
19. Which component of capital structure determines the overall financial risk in an organization?
20.
What is financial risk?
Financial Risk may be defined as the obligation of interest payment on debt consisting of debentures, bonds, long term loans whether secured or unsecured and repayment of debt.
21. What does higher business risk indicates?
it indicates the company’s financial position is weak and finds it difficult to repay principal amount of debt and interest thereon.
22. What does a lower business risk indicate?
Lower business risk indicates the company is financially strong and take the risk to raise more capital from the market by raising more debt.
23. What is meant by ‘Cost of Equity’?
24. What is the cost of raising funds called?
25. What is capital gearing?
26. What is meant by cost of debt?
27. What does a firm’s lower business risk indicate?
28. Name the source of finance carrying two fixed obligations viz., interest and redemption.
29. You are the finance manager of a newly established company. The directors of the company have asked you to plan the capital structure of the company. State any four factors that you would consider while planning the capital structure.
30. How Stock market conditions affect the capital structure specially when company is planning to raise additional capital?
31. “Both debt and equity have equal amount of risk.” Comment.
32. Explain the following factors which affect the choice of capital structure of a company:
(i) Cash Flow Position and (ii) Tax Rate
ASSIGNMENT 6
FINANCIAL MANAGEMENT
Fixed Capital
Refers to investment in long term assets
Investment in these assets include expenditure on acquisition, expansion,
modernization and their replacement.
Management of fixed capital involves allocation of firm’s capital to different
projects or assets with long term implications for the business.
These decisions are also called capital budgeting decisions and affect the
growth, profitability and risk of the business in the long run.
Importance of Capital Budgeting Decisions:
(i) Long term growth and effects - bearing on long term growth, effect on
future returns
(ii) Large amounts of funds involved - substantial portion of capital is blocked
(iii) Risk involved - affects returns as a whole in long term, influences overall
business risk
(iv) Irreversible decisions – decision cannot be reversed except at a huge cost
Factors affecting the requirement of fixed capital:
(i) Nature of business (ii) Scale of operations (iii) choice of
technique
(iv) Technology upgradation (v) Growth prospects (vi)
Diversification
(vii) Financing alternative (viii) Level of collaboration
Long term growth and effects - bearing on long term growth, effect on future
returns
Working Capital
Refers to excess of current assets over current liabilities
It facilitates smooth day to day operations
Includes cash, bank balance, bills receivable, stocks etc.
Factors affecting the requirement of working capital:
(i) Nature of business (ii) Scale of operations (iii) Business cycle
(iv) Seasonal factors (v) Production Cycle (vi) Credit
allowed
(vii) Credit availed (viii) Operating efficiency (ix)
Availability of raw material
(x) Growth prospects (xi) Level of competition (xii) Inflation
S.No. Question Answer (summarized form)
1. Identify why the requirements of ‘Fixed Capital’ for a trading concern are different from that of a manufacturing organization.
Trading concern deals in the movement of goods from one place to another and does not need to invest the money in the fixed assets whereas the manufacturing concern deals in the manufacturing the goods and needs to invest in the fixed assets.
2. State why the working capital needs for a “service industry” are different from that of a manufacturing industry.
Service industry needs lower amount of working capital as it does not produce the goods and hence not requires to hold the stock whereas the manufacturing industry requires higher amount of working capital to produce the gods and requires to hold the stock.
3. State how ‘Growth Prospects’ affect the working capital requirements of a company?
4. In case of inflation, does an enterprise need more or less of the working capital?
5. Length of Production cycle affects the working capital requirements of an organization. Explain how?
6. How do ‘Choice of Technique’ and ‘Nature of Business’ affect the fixed capital requirements of a company? Explain.
7. Pranav is engaged in ‘Transport Business’. Identify the working capital requirements of Pranav stating the reason in support of your answer. Pranav also wants to expand and diversity his Transport Business. Explain any two factors that will affect his fixed capital requirements.
8. Harish is engaged in warehousing business and his warehouses are generally used by the businessmen to store fruits. Identify the working capital requirements of Harish giving reason in support of your answer. Further Harish wants to expand and diversify his warehousing business. Explain any two factors that will affect his fixed capital requirements.
9. Manish is engaged in the business of garments manufacturing. Generally he used to sell his garments in Delhi. Identify the working capital requirements of Manish giving reason to support of your answer. Further Manish wants to expand and diversify his garments business. Explain any two factors that will affect his fixed capital requirements.
10. Neelab is engaged in ‘transport Business’ and transports fruits and vegetables to different states. Stating the reason in support of your answer, identify the working capital requirements of Neelabh. Neelabh also wants to expand and diversify his transport business, explain any two factors that will affect his fixed capital requirements.
Remembering Factors – Financial Management
S.No.
Factors Capital Budgetin
g
Financing
Decisions
Dividend Decision
s
Capital Structur
e
Working
Capital
Fixed Capita
l
1. Risk
2. Control
3. ROI
4. Flexibility
5. Scale of operations
6. Technology up- gradation
7. Stock market
reaction
8. Earnings
9. Taxation policy
10. Cash Flow Position
11. Floatation Cost
12. Cost of Debt
13. Regulatory framework
14. Access to capital market
15. Interest Coverage Ratio
16. Seasonal factors
17. Flexibility
18. Growth opportunities
19. Production Cycle
20. Cost
21. Inflation
22. Diversification
23. Scale of Business
24. Credit allowed
25. Level of collaboration
26. Other Companies
Assignment -7
Financial market
Q. 1. “Securities and exchange Board of India (SEBI) is the watchdog of the securities market.” Do you agree ? Give four reasons in support of your answer.
Q. 2. The director of a company wants to modernize its plants and machinery by making a public issue of Shares. They wish to approach stock exchange, while the finance manager prefers to approach a consultant for the new public issue of shares. Advice the directors whether to approach stock exchange or a consultant for new public issue of shares and why? Also advise about the different methods which the company may adopt for the new public issue of shares.
Q3 „ Financial market plays an important role in the allocation of scarce resources in an economy by performing various functions.‟ Explain any three functions of financial market,
Q4. “Stock exchange is the barometer of the economy”. In the light of the statement, discuss the functions of the stock exchange.
Q5. Explain the trading procedure on NSEI.
Q6. Differentiate between money market and capital market.
Q7. State four differences between primary market and secondary market.
Q.8 Mr. Salman’s late father used to buy and sell shares, on a large scale. After his
death, several share certificates were recovered from his bank locker. When all the
shares certificates were in his possession them he faced the problem of selling them,
because now all share transactions were in electronic form instead of paper from. His
friends informed him tat for doing transaction in shares he will have to open an account
with depository.
Name that account which is opened to do transaction in shares and also write the name
of a depository that is available in India.
Q.9 Few years back, people were not in the habit of saving. Its main reason was lack
of good opportunities for investment. Lack of saving and investment habit of the people
had direct effect on the economic development of the country. As a result, pace of
economic development of the country remained quite slow. When the country was
grappling with the problem, a kind of market emerged that helped in establishing
industries and at the same time made good opportunities for investment available. With
the setting-up of such a market, people acquired the habit of affecting saving. These
savings were invested. Gradually, economic development proceeded ahead. It is a kind
of market that can be called as barometer of a country’s economic development. It has
its own rules and by-laws which help in its operations and also in safeguarding the
interests of the investors. Moreover, it has to comply with the guidance issued by SEBI.
This market operates under the supervision of a management committee.
(i) Identify the market mentioned in the above paragraph.
(ii) Explain two characteristics of market as identified vide point (i) above.
(iii) Identify any two values that this market provides to the society.
Q10 “Manvi Global Parkashan Limited” is a company that publishes books. Company
wants to expand its business. Along with publication, company wants to do printing job
as well. Company requires ` 50 crore for this purpose. It has decided to mobilise this
amount through capital market. Company undertook intensive study of the capital
market. In the meanwhile, it observed that market was passing through boom period,
and in this situation inventors give priority in invest in equity shares so as to earn large
profits. Company, therefore, considered it proper to issue equity shares. To invite the
general public, prospectus was prepared and other procedures regarding floatation of
capital initiated.
Besides, company realized that, on the one hand, share floatation costs are likely to rise
very much and on the other hand, its cash flow position is not favourable. He also
apprehends that this situation with continue for about 6 months. Thus for the next six
months some additional funds will have to be collected. In order to mobilise these funds,
company deemed it proper to depend on money market instruments.
Identify the method of floatation of capital as mentioned in the above paragraph.
Besides above share issue method, mention two other methods.
Use of what kind of instrument will be appropriate for the money market. Clarify.
ASSIGNMENT-8
UNIT 9&10 – Financial Management and Financial Markets
Q1. Pintu, running a “Pintu Pakodey Wala” shop on a highway was very happy
to see the increasing demand for his pakodas. To cater to increased
demand, he hired 5 assistants, including 3 waiters and also promised them
to give, in addition to fixed remuneration, 10% of profits in equal
proportion to them if daily sales crossed Rs. 20,000. He had to buy more of
bread, gram flour (besan) and oil. So, he needed more funds.
a. Which type of funds Pintu requires?
b. Name the factor which is leading to increased requirements of the
above type of funds.
c. Explain any two more factors affecting requirements of such
funds.
HINT: a. Working capital, or short term finance; b. Scale of operations; c.
Any two
other factors affecting requirements of working capital
Q2. The basic purpose of SEBI is to create an environment to facilitate efficient
mobilization and allocation of resources through the securities markets. It
also aims to stimulate competition and encourage innovation. This aims at
meeting the needs of the three groups which basically constitute the
market.
(i) Name the three groups which basically constitute the market
(ii) What are the three main objectives of SEBI?
HINT : i) Issuer, Investor and Intermediaries (ii) To Protect the interest of
Investors, To Regulate the Securities Market and To Develop the Securities
Market
Q3. Smita Ltd. has announced that it is taking various strategic initiatives to
increase its share in the mobile phone market in India. The strategy
included bolstering its distribution network, rolling out a number of mobile
phone models in all price segments, and adopting a new positioning for the
brand supported by celebrity endorsement. With these initiatives, the
company aimed to increase its market share in India by 100 percent in
2014. Smita Dutt, country head of Smita Ltd., said, "We are looking at
doubling our market share to 15 percent in 2014, which at present is
around 7-8 per cent. The company will make required investments in
building the brand, expanding channels and rolling out new models.
Name and explain which financial management decision is discussed in
above case.
Also mention which category of financial market will be suitable to raise
fund for this purpose and why?
HINT: Investment Decision; Capital Market - As long-term finance is
needed to increase the share in mobile phone market.
Q4. ‘Joker’ Limited is a real estate company which was formed in 1975. In
about 35 years of its existence, the company has managed to carve out a
niche for itself in this sector. Lately, this sector is witnessing a boom due to
the fact that the Indian economy is on the rise. To expand its business in
India and abroad, the company is weighing various options to raise money
through equity offerings in India. It is also planning to list itself on New York
stock exchange to raise money through ADRs. To make its offerings
attractive, it is planning to offer host of financial products to its
stakeholders and investors and also expand its listing at NSE after
complying with regulations of SEBI.
a. Assuming yourself to be an investor, discuss the first two steps that
you need to take for buying securities offered by the above
company.
b. Do you think the company will be able to attract sufficient investors
for its equity offerings? Why/ why not?
c. How does SEBI exercise control over Joker limited in interest of
investors?
HINT: a. Selection of Broker, Opening demat account with depository; b.
Yes, as the market is experiencing boom and investors will be willing to
take risk; c. Regulatory functions of SEBI
Q5. Mukkaddar ka Sikandar Enterprises is a company engaged in production
of organic foods. Presently, it sells its products through indirect channels of
distribution. But, considering the sudden surge in the demand for organic
products, the company is now inclined to start its online portal for direct
marketing. The financial managers of the company are planning to use debt
in order to take advantage of trading on equity. In order to finance its
expansion plans, it is planning to raise a debt capital of Rs. 40 lakhs through
a loan @10% from an industrial bank. The present capital base of the
company comprises of 9 lakh shares of Rs. 10 each. The rate of tax is 30%.
In the context of the above case,
a. What is the condition necessary for taking the advantage of trading
on equity?
b. Assuming the expected rate of return on investment to be same as it
was for the current year, i.e. 15%, do you think the financial
managers will be able to meet their goal? Show your workings
clearly.
HINT: a. Condition is ROI should be greater than cost of debt; b. Yes,
the finance manager will be able to achieve its objective and get the
benefit of trading on equity. Following are the workings:
Present situation Amount (Rs.)
Proposed situation Amount (Rs.)
Equity share capital 90,00,000 90,00,000
10% Debt - 40,00,000 ROI 15% 15%
Tax Rate 30% 30%
EBIT (Total funds used X 15%) 1,35,000 19,50,000 Less Interest on debt @ 10% - 4,00,000
EBT 1,35,000 15,50,000 Less Tax @ 30% 40,500 4,65,000
EAT 94,500 10,85,000 EPS (Number of equity shares 9,00,000)
0.105 1.21
EPS is increasing, so, Company will be getting benefit of Trading on
Equity.
Assignment -9
Chapter 11– Marketing
Questions
1. Explain the concept which emphasis that, ‘companies do not sell what they
can make rather they make and sell what the customer needs.’
2. Sony Ltd. introduced a television set with new features in the market at a high
price but when the same features used by other electronic companies in their
television sets then the prices of Sony Ltd’s television sets was reduced by the
company. Mention the name of strategy the company is following. Also
explain the strategy in short.
3. Nisha, a school bag manufacturer decided to improve the product for profit
maximisation and thus added a water bottle holder to the existing design.
a) Identify the marketing management philosophy adopted by Nisha, and
b) Explain the philosophy on the basis of :
(i) Main Focus
(ii) Means and Ends
4. Mansi, a manufacturer of school uniforms, decided to maximize her profits by
producing and distributing at large scale and thereby reducing the average
cost of production:
(a) Identify the marketing management philosophy adopted by Mansi.
(b) Explain this philosophy on the basis of –
(i) Main Focus
(ii) Means and Ends
5. Jasdeep, a dealer in school uniforms, decided to maximize his profits by using
different aggressive promotional efforts.
(b) Identify the market management philosophy adopted by Jasdeep.
(c) Explain the philosophy on the basis of –
(i) Main Focus
(ii) Means and Ends
6. Identify the marketing concept or philosophy involved:
1. Quantity is more important than quality
2. Quality is more important than quantity
3. Focus is on pushing product to the customer
4. Product improvement is carried out overtime
5. If left alone, customers would not buy or buy enough of a firm’s products
6. Demand for the product exceeds supply
7. Marketing plus social concern
8. Aggressive advertising
9. Innovation and improvement
10. Affordable price with wide distribution network
11. ‘Create products and sell them’
12. Combination of product quality, competitive price, commitment and relationship
13. ‘find wants and fill them’
14. Product of high quality would sell
15. ‘They don’t sell what they can make rather they make what they can sell’
7. Define grading as a function of marketing.
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
_____________
8. Define standardization as a function of marketing.
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
___________
9. Which marketing function is concerned with informing the customer about
the product?
______________________________________________________________
_______________________
10. Which marketing function is involved in physical movement of goods from
one place to another?
______________________________________________________________
_______________________
11. Explain the following functions of marketing:
(i) Gathering and analyzing market information
(ii) Market planning
(iii) Product designing and development
(iv) Customer support services
Assignment –10
MARKETING MANAGEMENT
S.No. Question Answer (summary)
1. What is marketing mix?
Marketing mix can be defined as a set of marketing tools that the firm uses to achieve its objectives in the target market. The elements of Marketing are popularly known as FOUR Ps of marketing; PRODUCT PRICE, PLACE and PROMOTION.
2.
‘The elements of marketing mix are popularly known as 4Ps of marketing’. Explain briefly these elements of marketing mix.
3.
“It is necessary that goods and services must be made available to the customer at the right place, in right quantity and at the right time.” Name and explain the concerned element of marketing mix.
4.
Name the element of marketing mix in which a set of firms and individuals creates possessions, place and time utility and helps in market offering also explain any five important functions performed by this element.
5.
Identify and explain the promotional tool of marketing mix which plays a persuasive, service and informative role and thereby link a business firm to its customers. Also explain by giving any four reasons how this tool helps in increasing the sales of businessmen.
6. Name two elements of product mix.
7.
A company has to decide about its price policy, credit policy, terms of payment etc. Name the concept which the company is trying to decide.
8. Name two elements of price mix
9. Give two elements of place mix
10.
Name the element of marketing mix in which a set of firms and individuals create procession, place and time utility and helps in market offering.
11. Name two elements of sales promotion.
12. Name the element of promotion mix
13. Define price.
Price is what (1) A buyer is willing to pay, (2) A selleris willing to accept, and (3) The competition is allowing to be charged.
14. State objectives of pricing Objectives of pricing may be Profit
Maximization, Sales Maximization, to create a Special Image etc.
15.
Give the meaning of ‘Price’ as an element of ‘Marketing – Mix.’ State any three factors which affect the price determination of a product.
16. Who are the channels of distribution?
Channels of distribution are the set of firms and individuals that take title, or assist in transferring title to particular goods or services as it moves from the producers to the customers.
1. 17. Which types of utilities do the channels of distribution provide?
They provide time utility, place utility and possession utility.
18. What do you mean by the levels of channels of distribution?
Levels of channels of distribution refer to the number of middlemen between producer and the ultimate customer.
2. 19. How can you classify the levels of channels ofdistribution?
3. 20. What is meant by “Direct Channel of Distribution”? List any four methods of direct distribution.
4. 21. Name the factors which affect the choice ofchannels of distribution.
5. 22.
Which type of channel of distribution will be suitable in the following cases:
a) For a perishable product
b) For a product having large number of buyers
c) For a product of highly technical nature
d) For a less expensive product
e) For a product whose customers are scattered throughout the country
f) For a heavy machinery to be used in factory
23. Name two techniques of sales promotion.
1. 24. Define sales promotion.
2. 25. Enumerate any one role of public relations.
3. 26. Name the sales promotion technique in which ‘Scratch Cards’ are used.
4. 27. Identify and explain the promotional tool of marketing mix which is an impersonal form of communication and is paid for by the marketer. Also explain any three benefits of this tool.
28. Identify and explain the promotional tool of marketing mix which involves oral presentation of message with one or more prospective customers for the purpose of making sales. Also explain any three benefits of this tool in the economic progress of a society.
5. 29. Personal selling plays a very important role in the marketing of goods and services.” Do you agree? Explain any four reasons in support of your answer.
30. Explain any three qualities of a successful salesman.
6. 31. Various tools of communication are used by the marketers to promote their products”. Answer the following questions:
a) Why do companies use all tools at the same time?
b) Name and explain the most commonly used non-personal tool of promotion which is paid for by the marketer.
c) Which tool of promotion will primarily be used for the following:
(i) To get good corporate image without being paid for. (ii) An existing product meant for mass usage by literate people.
(iii) To introduce new product to a particular class of people through door to door visits.
32. Advertising is social waste as it adds to cost, undermines social values and confuses the buyer.’ Explain how?
33. “Advertising costs are passed on to the consumers in the form of high prices.” Comment
34. Identify the tool or element of promotion in the following cases:
a) It is highly flexible as a message can be adjusted as per situation. b) It is a paid form of non-personal presentation by an identified sponsor. c) It involves direct face to face communication between the seller and the
buyer.
35. Which of sales promotion is considered good for introducing a new product or brand in the market?
36. Which method of sales promotion is considered suitable during the off season?
37. Identify the method of sales-promotion in the following cases: a) A mobile company offers a discount of `1,000 to clear off excess inventory. b) A customer gets `5 off on return of an empty wrapper while making a new
purchase of the same product. c) A offers a pack of ½ kg. of sugar with the purchase of 5 kg bag of wheat
flour. d) A company offers 40% of extra shaving cream in a pack of 500 gms. e) Scratch a card and get a gold coin with the purchase of cold drink. f) Purchase goods worth `50,000 and get a holiday package worth `10,000
free.
38. What are the products in your opinion, for which (a) personal selling and (b) advertising would be more effective? Give any two examples in each case and also give reasons in support of your answer.
.
ASSIGNMENT 11
UNIT 5 – Marketing and Consumer Protection
Q1 .Chanchal, along with her daughter, went to a garments shop to buy a dress.
The salesperson showed them more than 20 dresses, but they did not like any.
Later, after sometime, she selected a dress and asked for heavy discount on it, as
the dress seemed to have a hefty price tag. The salesperson got irritated and
angry and shouted at them.
a.Which right of consumer was Chanchal exercising?
b.Which responsibility of consumer did Chanchal fulfill by asking for heavy
discount?
c.Which values are being violated by the salesperson?
HINT : a. Right to Choose; b. Ensuring to get a fair deal; Values – Good
behavior in human interaction, Courtesy
Q2. A famous fast food joint ‘Fresh Foods Ltd.’ has branches in different parts of
Delhi. They are planning to cope up with their competitor ‘Nutri Foods Ltd.’ by
introducing a new and healthy meal for the kids and teenagers.
The CEO of ‘Fresh Foods Ltd.’ had a meeting with the marketing manager in this
regard and he suggested consulting a nutritionist and then deciding about the
necessary ingredients for that meal.
The firm decides to keep the price of the product low at Rs.99 to attract the kids
and teenagers as they think that the consumers usually purchase more units at a
low price. They also decided to offer a small toy as a gift along with each purchase
of a meal.
a. The above para signifies two factors affecting price determination.
Name them.
b. Quote the lines from the above para that denotes these two factors.
c. A commonly used Sales Promotion activity has been referred to in
the above para.
d. Explain any other Sales Promotion activity which can be applied in
place of the above technique to make the product popular.
HINT : a. i. The utility & demand; ii. Extent of competition in the
market
b. i. The consumers usually purchase more units at a low
price.
ii. They are planning to cope up with their competitor.
c. Product combination
d. Any other Sales Promotion activity – Instant draws and
assigned gifts.
Q3. Kumar used an entire tube of men’s moisturizer of a famous brand. This
brand was endorsed by a famous bollywood actor which claims to bestow
lighter skin & contains a substance that ensures oil & sweat free skin.
But his skin had no effect of being fair even after an entire tube was
consumed. He wrote to the consumer helpline of this
Company asking for documentary scientific proof that this cream can lead
to whiteness of the skin.
No response was received by him from the company regarding this; so he
sent the matter to department of consumer affairs seeking third party
verification of the product.
i. Name and explain the 2 rights of consumers violated by the
company.
ii. Also explain any other 2 rights of the consumer.
HINT : i. Right to be heard & Right to seek redressal
ii.Right to safety & Right to be informed.
Q4. ABC believed that it could maximize its profit by producing hair dye at a large
scale. Similarly XYZ Ltd who also sold hair dye laid more emphasis on society and
customer rather than quantity of the product. XYZ Ltd grew within few years and
reached heights while ABC suffered losses and had to close down.
(i) What could be the possible reason for closing down?
(ii) Which market management philosophy do you think both the
companies followed?
(iii) How can ABC overcome its depressed position?
HINT: (i) ABC laid emphasis on quantity rather than customer satisfaction
(ii) ABC – Production concept & XYZ – Societal marketing concept
lay more emphasis on customer satisfaction
(iii) ABC should produce goods as per needs and wants of
customers, to ensure maximum customer satisfaction.
Q5. Bhanu, purchased a packet of Lays and sensed it to be underweight. He
wrote twice to the manufacturer, while the first letter got no response, in
reply to the second, it offered gift hampers which he refused. Bhanu
approached VOICE, Delhi who wrote to Pepsi Co. Company refused to accept
their fault. VOICE took the issue to Consumer Disputes Redressal Forum and
got a favourable ruling.
a) Which level of the three tierRedressal Mechanism would VOICE have
approached?
b) State the full form of VOICE.
c) Discuss the two consumer rights which Bhanu is exercising.
d) State the value(s) ignored by Pepsi Co .
HINT: a.District Forum
b.Voluntary Organisation in Interest of Consumer Education
c. Right to be heard and right to seek Redressal
d. Values: social responsibility towards consumers, ethical trade
practices, honesty
Q6. Mr. Tarun Seth and his wife, Pratibha Seth had booked business class tickets
of an Air Mindo Flight from New York to Mumbai on 14th October,2014 and paid a
total of Rs. 2,43,241. The couple had paid for business class seats and found the
seats defective. As a result, they had to bear physical discomfort and mental
harassment. The couple filed a complaint with the help of Consumer Education
and Research Society against the company at Consumer Redressal Forum,
Ahemdabad. The court found the airline company guilty of deficiency of services
and directed to refund the price of the ticket along with interest @9% per annum.
(a) Which consumer right did Mr. Seth exercise to claim the refund of
tickets? Explain.
(b) Explain any two more consumer rights.
(c) Above is the case of deficient services, had some organization
supplied defective goods, what relief could have been received by
the aggrieved consumer. Mention any two such reliefs.
HINT: a. Right to seek Redressal; b. Right to safety, Right to information; c.
Removal of defect from the goods, Replacement of defective product with a
new one, free from any defect.
Q27. Tendril Toys Company is manufacturing toys for children of different age
groups. Recently, it has launched its new product range of foldable automatic
cars for age group of 1-5 years. The product is somewhat complex and requires
demonstrations prior to sale. Since imported machines have been used to
produce the cars, their per unit production cost is high. The company wishes to
market its products presently only in Delhi. The company plans to spend
around Rs. 50 crores for its distribution. Suggest the level(s) of distribution
channel that the company should use and state the guiding factors behind
your suggestion.
HINT: Direct Channels, Factors affecting this choice of channels of
distribution – Complexity of product, Unit value of the product,
Geographical concentration of potential buyers (to be marketed in Delhi
only), Financial Strength of the company
Q28. The second largest soft drink player in the world, Pepsi has implemented
several smart strategies in the last decade to improve its turnover and
profits. Pepsi, unlike its major competitor Coca Cola has expanded in the
breakfast as well as snacks segments with brands like Lays, Kurkure and
Cheetos. Quaker Oats being the recent addition. Apart from this Pepsi Co
keeps roping in celebrities like Sachin Tendulkar, M.S.Dhoni ,RanbirKapoor
and others .
Discuss in detail the two elements of marketing mix highlighted in the given
case study.
HINT: Product Mix and Promotion Mix
Revision Assignment
UNIT – FINANCIAL MANAGEMENT & FINANCIAL MARKETS
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Q11:
Q 12
FINANCIAL MARKETS
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