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Satya Prakash… (Class 12 Business Studies SQP 2025-26, Q31)

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Business StudiesCBSE Class 12 · Sample paper, session 2025-26 · 6 marks · Long answer

CBSE Class 12 Business Studies sample paper 2025-26: question 31

From the official CBSE sample question paper for 2025-26, section D, question 31, for 6 marks. Try it first; the hints and our step-by-step solution are below.

Q31 · 6 marks · Long answerCompetency-basedFinancial Management

Satya Prakash has been successfully running a dry fruit wholesale business in Rajasthan for the past five years. He makes sufficient investments in current assets in order to facilitate smooth day-to-day operations of the business. The company has recently sold dry fruits worth ₹ 50 lakhs to one of its corporate customers, ‘Deshmukh Pure Grains’ on a strict credit policy. Satya Prakash then immediately placed an additional order for replenishment of stock. However, he received the dry fruits from his supplier after a large time lag.

  1. a)

    State the concept of Financial Management discussed above.

    2 marks
  2. b)

    Briefly explain the factors highlighted above that will affect the requirement of the concept identified in part a).

    4 marks

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2025-26.

Hints

Open one hint at a time and try again before the next.

Hint 1

Current assets for day-to-day operations point to which decision?

Hint 2

Look for the credit policy and the delay in supply in the case.

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. a) Working capital decision. It concerns the levels of cash, inventory and receivables, the current assets that support day-to-day operations.

    2 marks

  2. b) Credit allowed: Satya sold on a strict credit policy; strict credit means fewer debtors, so less working capital is needed (a liberal policy would need more).

    2 marks

  3. Availability of raw material: Stock arrived after a long time lag (long lead time); the longer the lead time, the more stock must be held and the more working capital is needed.

    2 marks

Answer: a) Working capital decision. b) Credit allowed and availability of raw material (lead time).

Where the marks are

  • a) Identification (1) + stating (1)
  • b) Two factors: 2 marks each

Revise the chapter

Practise this chapterBoard-style questions from Financial Management, one at a time, marked against the answer key and marking points.Back to the full paperSample paper 2025-26: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.