IGNOU MMPF-001 December 2024 Previous Year Question Paper

Q1.Define working capital and discuss the constituents of working capital. What are the different tools used for planning of working capital ? [ 2 ]

Q2.You are required to compute the duration of the operating cycle for each of the two years from the following data : Particulars Year 1 Year 2 Stocks : Raw materials 20,000 27,000 Work-in-process 14,000 18,000 Finished goods 21,000 24,000 Purchase of raw materials 96,000 1,35,000 Cost of goods sold 1,40,000 1,80,000 Sales 1,60,000 2,00,000 Debtors 32,000 50,000 Creditors 16,000 18,000 Also give your comments on the increase/decrease of the operating cycle. Assumptions :

(i) 360 days per year for computation purposes. [ 3 ] MMPF–001

(ii) Raw material s consumed is equal to purchases.

(iii) Cost of goods manufactured is equal to cost of goods sold.

(iv) Credit sales is equal to total sales.

Q3.While designing credit policy of a firm, what factors are taken into consideration ? Discuss the five dimensions popularly called f ive C’s of credit analysis.

Q4.Why do firms need to manage cash ? Discuss the internal and external determinants that affect the cash flows of firms.

Q5.How is value created through working capital management ? Explain the principles laid down by Walker with respect to working capital investment.

Q6.What do you understand by the term ‘Commercial Papers (CP)’ ? Discuss the eligibility of companies to issue CPs and the terms and conditions on which CPs are issued.

Q7.Describe the procedure followed for issuing CPs. [ 4 ]

Q8.Explain the unique characteristics of Working Capital Management in SMEs. Discuss the determinants of working capital management in SMEs.

Q9.Write short notes on any four of the following :

(a) Cash Reserve Ratio (CRR)

(b) Trade Credit

(c) Behavioural Biases

(d) Physical and Notional Cash Pooling

(e) Mortgage

(f) F-S-N Analysis