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

Ques:- What is fund based lending? What are the various forms in which fund based lending may be made by banks?

Asked In :- Panacea Medical Technologies, Bank AL Habib, CTPS, Escorts, Everest Bank, Khaitan, Shriram Transport Finance, First American, Mansukh Securities & Finance, SR Batliboi & Associates,

Right Answer:
Fund-based lending refers to the provision of loans or credit by banks that involves the actual disbursement of funds to borrowers. The various forms of fund-based lending by banks include:

1. Term Loans
2. Working Capital Loans
3. Overdraft Facilities
4. Cash Credit
5. Demand Loans
6. Bill Discounting

Financial Analyst financial management

Ques:- Define Factoring? What is the procedure for factoring?

Asked In :- MedGenome Labs, Cervello India, Airborne Recruiting, Ramsey Solutions, ABN AMRO, Anand Rathi, DreamGains, Eastman Chemical, GSFC, ITC Indian Tobacco Company,

Right Answer:
Factoring is a financial transaction where a business sells its accounts receivable (invoices) to a third party (the factor) at a discount in exchange for immediate cash.

The procedure for factoring typically involves the following steps:
1. The business identifies its accounts receivable to be factored.
2. The business applies to a factoring company and submits the invoices.
3. The factoring company evaluates the creditworthiness of the business's customers.
4. Upon approval, the factoring company advances a percentage of the invoice value (usually 70-90%).
5. The factoring company collects the payment from the customers when the invoices are due.
6. Once the customers pay, the factoring company releases the remaining balance to the business, minus a fee for the service.

Financial Analyst financial management

Ques:- Explain Equity Warrants. Call warrants, Put warrants

Asked In :- BillDesk, Cervello India, Bajaj Finserv Lending, ABN AMRO, Bapco Bahrain Petroleum Company, CMAT, DSVV, Exxaro, Himatsingka Seide, JK Lakshmi Cement,

Right Answer:
Equity warrants are financial instruments that give the holder the right, but not the obligation, to buy a company's stock at a specific price within a certain time frame.

- **Call warrants** allow the holder to purchase shares at a predetermined price, benefiting if the stock price rises above that price.
- **Put warrants** give the holder the right to sell shares at a predetermined price, benefiting if the stock price falls below that price.

Financial Analyst financial management

Ques:- Tell the advantages and disadvantages of commercial papers?

Asked In :- VALUEWING CONSULTANCY SERVICES (P), Offshore Accounting & Taxation Services, Invesco, ABN AMRO, AR Rahman Foundation, Bangladesh Securities and Exchange Commission BSEC, Eastman Chemical, Fintellix, ITC Indian Tobacco Company, TSS Consultancy,

Right Answer:
**Advantages of Commercial Papers:**
1. Lower cost of borrowing compared to bank loans.
2. Flexibility in terms of maturity and amount.
3. Quick access to funds.
4. No collateral required.

**Disadvantages of Commercial Papers:**
1. Limited to companies with high credit ratings.
2. Not suitable for long-term financing.
3. Market conditions can affect availability.
4. Requires a strong financial position to issue.

Financial Analyst financial management

Ques:- What functions do the registrars to the issue perform?

Asked In :- IPE Global, NISC Exports Services (p), Shakti Pumps, Offshore Accounting & Taxation Services, Engro, Everest Bank, ITC Indian Tobacco Company, JSL, OCCL, PRAN-RFL,

Right Answer:
Registrars to the issue perform functions such as managing the issuance of securities, maintaining records of shareholders, processing applications for shares, ensuring proper allocation of shares, and handling the transfer of shares between buyers and sellers.

Financial Analyst financial management

Ques:- What are the principles of cash management?

Asked In :- MatchMove India, Solitaire Infosys, Cummins India, Polestar Solutions & Services India LLP, StockEdge, Anand Rathi, Birla Cement, DataCore, Everest Bank, Niper,

Right Answer:
The principles of cash management include:

1. **Cash Flow Forecasting**: Predicting future cash inflows and outflows.
2. **Liquidity Management**: Ensuring sufficient cash is available to meet obligations.
3. **Cash Collection**: Efficiently collecting receivables to improve cash flow.
4. **Disbursement Control**: Managing payments to optimize cash usage.
5. **Investment of Surplus Cash**: Investing excess cash to earn returns while maintaining liquidity.
6. **Monitoring and Reporting**: Regularly reviewing cash positions and performance.

Financial Analyst financial management

Ques:- What factors affect working capital requirement?

Asked In :- ISKPRO, Gallagher Service Center LLP, Ramsey Solutions, Anand Rathi, CPCL, OCCL, World Bank, Adairs, Algorithmic Trading Strategies Pty, Sage Intacct,

Right Answer:
The factors that affect working capital requirement include:

1. **Nature of Business**: Different industries have varying working capital needs.
2. **Business Cycle**: Economic conditions can influence sales and inventory levels.
3. **Seasonality**: Seasonal fluctuations in demand can impact inventory and cash flow.
4. **Credit Policy**: The terms offered to customers can affect accounts receivable.
5. **Inventory Management**: Levels of inventory held can influence cash tied up in stock.
6. **Supplier Terms**: Payment terms with suppliers can affect cash outflows.
7. **Sales Volume**: Higher sales typically require more working capital.
8. **Operational Efficiency**: Efficient operations can reduce the need for working capital.
9. **Market Conditions**: Competitive pressures can impact pricing and sales.
10. **Growth Rate**: Rapid growth may require additional working capital to support expansion.

Financial Analyst financial management

Ques:- What does capital market mean? How does the company raise funds in capital market?

Asked In :- Valethi, Cervello India, CONDUENT BUSINESS SERVICES INDIA LLP, IATA, Jai Balaji, OCCL, TTN, Crawford and Company, Commonwealth Bank of Australia, Tata AIA Life,

Right Answer:
Capital market refers to a financial market where long-term debt or equity-backed securities are bought and sold. Companies raise funds in the capital market by issuing stocks (equity) or bonds (debt) to investors, allowing them to obtain capital for growth and operations.

Financial Analyst financial management

Ques:- Explain: Perpetual inventory system and its aims.

Asked In :- Panacea Medical Technologies, Protiviti Consulting, BOM, BPSC, ITC Indian Tobacco Company, KKR, Lucky Cement, OCCL, Bajaj Allianz General Insurance Co, Crawford and Company,

Right Answer:
A perpetual inventory system is a method of tracking inventory levels in real-time, updating records continuously as sales and purchases occur. Its aims are to provide accurate inventory data, improve stock management, reduce discrepancies, and enhance decision-making regarding inventory control.

Financial Analyst financial management

Ques:- Who decides rate of interest for debentures?

Asked In :- Bank AL Habib, JSL, Fareportal India, Bowlero Corp, ELYSIUM GROUP OF COMPANIES, GAIN Credit, SAP Concur, The Ramco Cements, IFFCO Kisan Sanchar, RWE Supply & Trading,

Right Answer:
The rate of interest for debentures is decided by the issuing company based on market conditions, credit rating, and investor demand.

Credit Manager financial management

Ques:- What are the techniques available for evaluation of capital expenditure proposals?

Asked In :- IATA, Shriram Transport Finance, Thriveni Earthmovers, TJSB Bank, Titan Eye Plus, Poundland, Action Against Hunger, Sime Darby, MediaMarktSaturn, Scentre Group,

Right Answer:
The techniques available for evaluation of capital expenditure proposals include:

1. Net Present Value (NPV)
2. Internal Rate of Return (IRR)
3. Payback Period
4. Profitability Index (PI)
5. Discounted Payback Period
6. Accounting Rate of Return (ARR)

Credit Manager financial management

Ques:- What are the general factors affecting capital structure?

Asked In :- Escorts, Niper, P&G Procter Gamble, Cleartrip, Health Prime Services (India), Awign Enterprises, University of Derby UK, Withers Worldwide, Oilserv (Nigeria), Anthesis Consulting Group,

Right Answer:
The general factors affecting capital structure include:

1. **Business Risk**: The inherent risk in the company's operations.
2. **Tax Considerations**: The tax benefits of debt financing.
3. **Financial Flexibility**: The ability to raise funds easily when needed.
4. **Cost of Capital**: The cost associated with different sources of financing.
5. **Market Conditions**: Economic environment and investor sentiment.
6. **Company Size and Age**: Larger, older firms may have different capital needs than smaller, newer ones.
7. **Asset Structure**: The nature of the company's assets and their liquidity.
8. **Management Philosophy**: The attitudes of management towards debt and equity financing.

Credit Manager financial management

Ques:- How is the pricing of the issue done by following? a.) Listed Company, b.) Unlisted Company?

Asked In :- Basware India, Derrico, NACL, National Stock Exchange of India, Mansukh Securities & Finance, SAP Concur, Awign Enterprises, Ashoka Buildcon, SNB, TJSB Bank,

Right Answer:
a.) For a listed company, pricing is typically determined by market conditions, investor demand, and the company's stock price. b.) For an unlisted company, pricing is usually based on the company's valuation, financial performance, and negotiations with investors.

Credit Manager financial management

Ques:- Explain bank guarantees? How do they work?

Asked In :- EPFO, Fluor Daniel, GSFC, Nations Trust Bank, NBP National Bank of Pakistan, PRAN-RFL, Canara HSBC Oriental Bank of Commerce Life Insurance Co, O P Jindal Global University, SNB, Next Retail,

Right Answer:
A bank guarantee is a promise made by a bank to cover a loss if a borrower fails to fulfill their contractual obligations. It acts as a safety net for the party receiving the guarantee. When a bank issues a guarantee, it assures the beneficiary that they will receive payment or compensation up to a specified amount if the borrower defaults. The borrower typically pays a fee to the bank for this service. If the borrower fails to meet their obligations, the beneficiary can claim the amount from the bank, which will then seek reimbursement from the borrower.

Credit Manager financial management

Ques:- List out the advantages and risks associated with Equity warrants?

Asked In :- Rigved Technologies, Bajaj Finserv Lending, Exxaro, Pramata, Huron Consulting Group, Imperium Management, Repos Energy, InCred, NISM, LVS,

Right Answer:
**Advantages of Equity Warrants:**
1. Potential for high returns if the company's stock price increases.
2. Leverage effect, allowing investors to control more shares with less capital.
3. Can enhance the attractiveness of a bond or preferred stock offering.
4. Flexibility to invest in the company without immediate capital outlay.

**Risks of Equity Warrants:**
1. Risk of total loss if the stock price does not exceed the exercise price.
2. Dilution of existing shareholders' equity if warrants are exercised.
3. Time-sensitive; warrants have expiration dates.
4. Market volatility can affect the value of the warrants significantly.

Credit Manager financial management

Ques:- What are the advantages of issuing bonus shares to the shareholders and creditors?

Asked In :- DataCore, Gujarat Alkalies and Chemicals GACL, Bajaj Allianz General Insurance Co, Suryoday Small Finance Bank, India YAMAHA Motor, Jindal Poly Films, RDC Concrete (India), Finonyx, Jumio, ASAP Kerala,

Right Answer:
The advantages of issuing bonus shares to shareholders and creditors include:

1. **Increased Liquidity**: Bonus shares increase the number of shares in circulation, enhancing liquidity in the market.
2. **Shareholder Confidence**: It signals confidence in the company's future, potentially boosting shareholder morale and loyalty.
3. **No Cash Outflow**: It allows companies to reward shareholders without using cash, preserving cash flow for other needs.
4. **Improved Market Perception**: It can improve the company's market perception and attract new investors.
5. **Debt Management**: For creditors, it can enhance their equity stake, potentially improving their position in the company.

Credit Manager financial management

Ques:- What are the techniques available to monitor the receivables?

Asked In :- Wellness Forever, NISC Exports Services (p), TBO Group, ABN AMRO, District Cooperative Central Bank DCCB, Federal Bank India, Awfis, Thriveni Earthmovers, Expeditors International (India), Valuefy Solutions,

Right Answer:
1. Aging Analysis
2. Accounts Receivable Turnover Ratio
3. Collection Effectiveness Index (CEI)
4. Dunning Letters
5. Credit Risk Assessment
6. Customer Payment History Review
7. Regular Reconciliation of Accounts
8. Use of Collection Software and Tools

Credit Manager financial management

Ques:- How is optimum cash balance maintained?

Asked In :- Derrico, NDDB, SBI Life Insurance, Huron Consulting Group, Scotmid, ZEAL Group, EYG, Connor Clark & Lunn, E-Cell, Think 360,

Right Answer:
Optimum cash balance is maintained by forecasting cash flows, analyzing cash needs, setting a target cash balance, and regularly monitoring and adjusting cash reserves to ensure sufficient liquidity while minimizing idle cash.

Credit Manager financial management

Ques:- What current liabilities can be used as spontaneous sources for financing the working capital?

Asked In :- Rigved Technologies, Panacea Medical Technologies, NISC Exports Services (p), Corient Business Solutions, Himatsingka Seide, JK Lakshmi Cement, Kazi Farms, Shapoorji Pallonji & Co, OfBusiness, DCM Shriram,

Right Answer:
Current liabilities that can be used as spontaneous sources for financing working capital include accounts payable, accrued expenses, and short-term loans.

Credit Manager financial management

Ques:- What is time value of money? What are the techniques used for this?

Asked In :- NISC Exports Services (p), Chanar Sugar Mills, Exim Bank, Junior Assistant, NJ India, Pradan, O P Jindal Global University, Repos Energy, EYG, Varicent Software,

Right Answer:
The time value of money (TVM) is the concept that money available today is worth more than the same amount in the future due to its potential earning capacity. Techniques used for this include Present Value (PV), Future Value (FV), Net Present Value (NPV), and Internal Rate of Return (IRR).

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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