financial management Interview Questions and Answers in 2025 (100+ Q&A)

Ques:- What is underwriting? What role does it play?

Asked In :- Anand Rathi, Ashiana Housing, Worley Parsons, FIAT India Automobiles, TCI Express, Gardiner & Theobald, VistaJet, Nordea Bank, LifeLabs, ILO,

Right Answer:
Underwriting is the process by which a financial institution, such as a bank or insurance company, evaluates the risk of insuring or lending to an individual or entity. It involves assessing the applicant's financial information, creditworthiness, and other relevant factors to determine the terms and conditions of the financial product, such as loans or insurance policies. Underwriting plays a crucial role in managing risk and ensuring that the institution makes informed decisions about providing financial support.

Finance Executive financial management

Ques:- For how many days are public issues of shares kept open?

Asked In :- Panacea Medical Technologies, TBO Group, Tax Assistant, Synergy Consulting, RDC Concrete (India), Redcliffe Life Sciences, Turtle Bay, Sonova, Coco Fresh Tea, Oilserv (Nigeria),

Right Answer:
Public issues of shares are typically kept open for 3 to 10 days.

Finance Executive financial management

Ques:- Explain: bills of materials and its functions?

Asked In :- Chegg India, Arun Excello, Bajaj Allianz, Cadbury, GACL, RGCA, Kiran, iCliniq, Titan Eye Plus, Shivalik Bank,

Right Answer:
A bill of materials (BOM) is a comprehensive list of raw materials, components, and assemblies needed to manufacture a product. Its functions include:

1. **Inventory Management**: Helps track materials required for production.
2. **Cost Estimation**: Assists in calculating the total cost of production.
3. **Production Planning**: Guides the scheduling and workflow in manufacturing.
4. **Product Structure**: Provides a clear hierarchy of components and subassemblies.
5. **Communication**: Serves as a reference for various departments, ensuring everyone is aligned on product specifications.

Finance Executive financial management

Ques:- Define Balanced Capitalization?

Asked In :- Consero Global, Gujarat Alkalies and Chemicals GACL, SpringRole, Adani Gas, TwoPir Consulting, JP Infra, E-Ring, Kingston University London, Hargreaves Lansdown, Sonova,

Right Answer:
Balanced Capitalization refers to a financial structure where a company maintains an optimal mix of debt and equity financing, ensuring that neither is overly dominant. This balance helps minimize the overall cost of capital while maximizing financial stability and growth potential.

Finance Executive financial management

Ques:- Define Inter-corporate Deposits (ICDs)?Tell their main characteristic features?

Asked In :- Gallagher Service Center LLP, Finacus Solutions, Bitla, CTPS, Escorts, Kazi Farms, NDDB, Niper, Octopus, SKS Microfinance,

Right Answer:
Inter-corporate Deposits (ICDs) are short-term loans or deposits made by one company to another, typically for a period ranging from a few days to a few months.

Main characteristic features of ICDs include:

1. **Short-term Nature**: Usually for a duration of 7 days to 1 year.
2. **Interest Rate**: Generally higher than bank deposits but lower than other forms of borrowing.
3. **Unsecured**: Often not backed by collateral, relying on the creditworthiness of the borrowing company.
4. **Flexibility**: Can be customized in terms of amount and duration based on mutual agreement.
5. **Liquidity**: Provides quick access to funds for the borrowing company.

Finance Executive financial management

Ques:- Who can invest in commercial papers?

Asked In :- StockEdge, AR Rahman Foundation, BOM, Joyalukkas, Prakash Kochar & Co, Awfis, Haldor Topsoe, InCred, Turtle Bay, London Stock Exchange Group,

Right Answer:
Institutional investors, corporations, and high-net-worth individuals can invest in commercial papers.

Finance Executive financial management

Ques:- Explain the term working capital. What is the primary objective of working capital management?

Asked In :- Ramsey Solutions, Akij, IDeaS - A SAS Company, Estee Advisors, FinEdge, CSTEP, Hatsun Agro Product, Think Analytics, Turtle Bay, London Stock Exchange Group,

Right Answer:
Working capital refers to the difference between a company's current assets and current liabilities. It represents the funds available for day-to-day operations. The primary objective of working capital management is to ensure that a company has sufficient liquidity to meet its short-term obligations while maximizing its operational efficiency and profitability.

Finance Executive financial management

Ques:- What are the various choices available for a company to choose its dividend policy?

Asked In :- Jindal Aluminium, Milliman India, Finacus Solutions, Corient Business Solutions, Derrico, Maharashtra Industrial Development Corporation MIDC, Synchrony, Godrej Consumer Products, Zaggle, Imperium Management,

Right Answer:
A company can choose from the following dividend policies:

1. **Stable Dividend Policy**: Paying a consistent dividend amount regularly.
2. **Constant Payout Ratio**: Paying a fixed percentage of earnings as dividends.
3. **Residual Dividend Policy**: Paying dividends from leftover earnings after funding profitable investments.
4. **No Dividend Policy**: Reinvesting all earnings back into the business instead of paying dividends.
5. **Hybrid Policy**: Combining elements of different policies to balance dividends and reinvestment.

Finance Executive financial management

Ques:- List out the advantages of a LC to an exporter?

Asked In :- Booker Wholesale, MDINDIA HEALTH INSURANCE TPA PVT, Bajaj Finserv Lending, British Telecom BT, NDDB, Synchrony, SpringRole, Dechra Pharmaceuticals, EisnerAmper, SHCIL SERVICES,

Right Answer:
1. Guaranteed payment: The exporter is assured of payment as long as they meet the terms of the letter of credit.
2. Reduced risk: It minimizes the risk of non-payment by the buyer.
3. Improved cash flow: Payment is typically made promptly upon presentation of documents.
4. Enhanced credibility: A letter of credit can enhance the exporter's credibility with banks and buyers.
5. Access to financing: Exporters can use the letter of credit to secure financing from banks.
6. Clear terms: It provides clear terms and conditions for the transaction, reducing misunderstandings.

Finance Executive financial management

Ques:- Define Capital Rationing? What is the normal procedure followed for Capital Rationing?

Asked In :- Fintellix, Jai Balaji, Prakash Kochar & Co, Novel Office, Sage Intacct, Poundland, NELFT NHS, Hillingdon Hospitals NHS Foundation Trust, Koko Black, Timezone Group International,

Right Answer:
Capital Rationing is the process of allocating a limited amount of capital to various investment projects or opportunities, prioritizing those that offer the highest returns or strategic value. The normal procedure for capital rationing typically involves the following steps:

1. Identify potential investment projects.
2. Estimate the cash flows and returns for each project.
3. Rank the projects based on their profitability or strategic alignment.
4. Set a budget limit for total capital expenditure.
5. Select the combination of projects that maximizes returns within the budget constraint.

Credit Analyst/ Officer financial management

Ques:- What external factors determine the dividend policy?

Asked In :- Panacea Medical Technologies, IIRM, MNC Company, SAP Concur, AK Capital Service, Titan Eye Plus, TCI Express, Bidfood, Janus Henderson Investors, Value Village,

Right Answer:
External factors that determine the dividend policy include:

1. Economic conditions
2. Industry trends
3. Tax policies
4. Regulatory environment
5. Market competition
6. Shareholder expectations
7. Availability of profitable investment opportunities
8. Company’s financial health and cash flow状况

Credit Analyst/ Officer financial management

Ques:- What is the nature of a commercial paper?

Asked In :- Chegg India, Protiviti Consulting, Waterleaf Consultants, Duke Energy, Fluor Daniel, Maharashtra Industrial Development Corporation MIDC, Synergy Maritime, InvestoSure, Scotmid, Golden Moments,

Right Answer:
Commercial paper is a short-term, unsecured debt instrument issued by corporations to raise funds for working capital and other short-term financial needs, typically maturing in 1 to 270 days.

Credit Analyst/ Officer financial management

Ques:- Explain minimum subscription. What is the minimum subscription required for a company to utilize funds?

Asked In :- Williams Lea India, jusco, Adairs, S S Kothari Mehta & Co, ASAP Kerala, Timezone Group International, Grind Master Machines, Drip Capital, SFH Nigeria, Franke Faber India,

Right Answer:
Minimum subscription refers to the minimum amount of capital that a company must raise through its share offering before it can proceed with the issuance of shares and utilize the funds. The minimum subscription required for a company to utilize funds is typically specified in the company's prospectus and is usually set at 90% of the total amount of shares offered.

Credit Analyst/ Officer financial management

Ques:- What are the motives of a company behind holding the cash?

Asked In :- Protiviti Consulting, Waterleaf Consultants, CMAT, KSBC, Kiran, Shivalik Bank, escalon, Dobbies, IAG Cargo, Yara,

Right Answer:
A company holds cash for several reasons: to meet short-term obligations, to take advantage of investment opportunities, to maintain liquidity for operational needs, to manage unexpected expenses, and to ensure financial stability during economic fluctuations.

Credit Analyst/ Officer financial management

Ques:- Define capital structure? What are the principles of capital structure management?

Asked In :- Protege Solutions, ANSR GLOBAL CORPORATION, DFO, First American Corporation, Himatsingka Seide, IATA, GAIN Credit, iCliniq, First American, DCM Shriram,

Right Answer:
Capital structure refers to the mix of debt and equity that a company uses to finance its operations and growth. The principles of capital structure management include:

1. **Cost of Capital**: Balancing the cost of debt and equity to minimize overall financing costs.
2. **Financial Flexibility**: Maintaining the ability to raise funds when needed without excessive risk.
3. **Risk Management**: Assessing and managing the financial risk associated with different levels of debt.
4. **Control**: Ensuring that equity financing does not dilute ownership and control of the company.
5. **Market Conditions**: Adapting the capital structure based on current market conditions and investor sentiment.

Credit Analyst/ Officer financial management

Ques:- What methods are used to ascertain the risk in capital budgeting decisions?

Asked In :- IPE Global, Milliman India, ABN AMRO, Bank AL Habib, Exxaro, Hindustan Unilever, SpiceJet, Borosil Glass Works, Ashoka Buildcon, Vikas Group,

Right Answer:
The methods used to ascertain risk in capital budgeting decisions include:

1. Sensitivity Analysis
2. Scenario Analysis
3. Monte Carlo Simulation
4. Break-even Analysis
5. Risk-adjusted Discount Rate
6. Payback Period Analysis
7. Decision Tree Analysis

Credit Analyst/ Officer financial management

Ques:- What “rights issue” do the shareholders of a company have under Companies Act, 1956?

Asked In :- Razorpay-Startup, P&G Procter Gamble, RGCA, Expeditors International (India), InCred, Harrisons Malayalam, LVS, TD Direct Investing International, Camfed USA, Oilserv (Nigeria),

Right Answer:
Under the Companies Act, 1956, shareholders have the right to participate in a rights issue, which allows them to purchase additional shares in the company in proportion to their existing holdings, typically at a discounted price, before the shares are offered to other investors.

Credit Analyst/ Officer financial management

Ques:- Define credit analysis. What are the sources through which a company gets to know about a customer s credit worthiness?

Asked In :- MAHINDRA HOLIDAYS AND RESORTS INDIA LIMITED, Jindal Aluminium, ANSR GLOBAL CORPORATION, Corient Business Solutions, Bank AL Habib, Fluor Daniel, Niper, Novel Office, Star Health & Allied Insurance, Health Prime Services (India),

Right Answer:
Credit analysis is the process of evaluating a borrower's creditworthiness, which involves assessing their ability to repay loans based on their financial history, income, and other relevant factors.

Sources to determine a customer's creditworthiness include:

1. Credit reports from credit bureaus.
2. Financial statements (income statements, balance sheets).
3. Payment history with suppliers and lenders.
4. Bank statements.
5. Public records (bankruptcies, liens).
6. Personal interviews or questionnaires.

Credit Analyst/ Officer financial management

Ques:- List the advantages of a LC to an importer?

Asked In :- Peoplefy Infosolutions, Jindal Aluminium, Bitla, Derrico, Kohler India, Mother Dairy, Wartsila, MNC Company, HexaCorp, Valuefy Solutions,

Right Answer:
1. Payment security: The importer is assured that payment will only be made once the terms of the LC are met.
2. Risk reduction: It minimizes the risk of non-delivery or substandard goods.
3. Improved cash flow: The importer can negotiate better payment terms with suppliers.
4. Access to financing: LCs can facilitate easier access to trade financing from banks.
5. Enhanced credibility: Using an LC can improve the importer's reputation with suppliers.
6. Simplified documentation: LCs provide a clear framework for required documents, making transactions smoother.

Credit Analyst/ Officer financial management

Ques:- Define working capital cycle?

Asked In :- Razorpay-Startup, AJACKUS, Tally Solutions, Junior Assistant, Nigerian Defence Academy, Bowlero Corp, Absyz Software Consulting, Suryoday Small Finance Bank, IndiaMART, Bridgestone Global,

Right Answer:
The working capital cycle is the time it takes for a company to convert its current assets into cash through its operations. It measures the duration between the outlay of cash for raw material and the collection of cash from sales of finished goods.

The Financial Management category on takluu.com is designed for job seekers and professionals preparing for interviews in finance, accounting, and business management roles. This section focuses on the fundamentals of managing an organization’s financial resources effectively to maximize profitability and growth.

Topics covered include financial planning, budgeting, capital structure, working capital management, investment analysis, risk management, and financial reporting. Candidates will find detailed explanations of concepts such as cost of capital, cash flow analysis, ratio analysis, and dividend policies.

Interview questions often test your understanding of both theoretical concepts and practical applications, such as:

“How do you calculate the cost of capital for a company?”
“Explain the importance of working capital management.”
“What are the different types of financial ratios, and how are they used?”

Our content simplifies complex financial theories with real-world examples, case studies, and problem-solving approaches to help you prepare confidently. Whether you’re a fresher or experienced professional, this category equips you with the knowledge needed to excel in technical interviews and business discussions.

At Takluu, we regularly update the Financial Management category with the latest trends, tools, and best practices in finance to ensure you stay relevant and competitive.

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