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

Ques:- If turnover was not announced annualy, what are the problems arised?

Asked In :- Cummins India, Online vape shop, DFO, ITC Indian Tobacco Company, NBP National Bank of Pakistan, Worley Parsons, First American, Great Ormond Street Hospital, Robins & Day, easyfinancial,

Right Answer:
If turnover is not announced annually, it can lead to a lack of transparency, difficulty in assessing company performance, challenges in financial planning and budgeting, reduced investor confidence, and potential issues with compliance and regulatory requirements.

Finance Manager financial management

Ques:- How do you calculate sensex points?

Asked In :- Solitaire Infosys, Basware India, Bapco Bahrain Petroleum Company, Empower, Everest Bank, Tolani Maritime, Bajaj Allianz General Insurance Co, SBI Life Insurance, Thriveni Earthmovers, Vikas Group,

Right Answer:
Sensex points are calculated using the free-float market capitalization method. The formula is:

**Sensex = (Current Market Capitalization of the Index / Base Market Capitalization) x Base Index Value**

The base value is typically set at 100, and the market capitalization is adjusted for the free-float of the companies in the index.

Finance Manager financial management

Ques:- Define money market?

Asked In :- Protiviti Consulting, AB InBev, Bank AL Habib, First American Corporation, Prism Cement, First American, National Stock Exchange of India, Medline Industries, Expeditors International (India), Gardiner & Theobald,

Right Answer:
The money market is a sector of the financial market where short-term borrowing and lending of funds occur, typically involving instruments with maturities of one year or less, such as Treasury bills, commercial paper, and certificates of deposit.

Finance Manager financial management

Ques:- Describe and discuss the relevance of the Fisher Effect and the Purchasing Power Parity theories to a foreign currency dealer in a merchant bank

Asked In :- Shakti Pumps, Bangladesh Securities and Exchange Commission BSEC, Tax Assistant, GAIN Credit, CARE Ratings, Hollywood Bowl Group, NHS Midlands and Lancashire Commissioning Support Unit, LifeLabs, zehrs, XE,

Right Answer:
The Fisher Effect states that the real interest rate is equal to the nominal interest rate minus the expected inflation rate. For a foreign currency dealer, this means that changes in interest rates and inflation in different countries can affect currency values. If one country has higher nominal interest rates due to higher inflation, its currency may depreciate.

Purchasing Power Parity (PPP) suggests that in the long run, exchange rates should adjust so that identical goods cost the same in different countries. For a foreign currency dealer, this indicates that if a currency is overvalued or undervalued relative to another based on price levels, it will eventually adjust, impacting trading strategies.

Both theories help currency dealers anticipate currency movements based on economic indicators, allowing them to make informed trading decisions.

Finance Manager financial management

Ques:- Define Capital Turnover Ratio? What does it indicate?

Asked In :- Chanar Sugar Mills, District Cooperative Central Bank DCCB, MOIL, Macleods Pharma, O P Jindal Global University, Andhra Pradesh State Skill Development, Dynacom Tankers Management, Titan Eye Plus, TwoPir Consulting, Launchio Consulting,

Right Answer:
The Capital Turnover Ratio is a financial metric that measures how efficiently a company uses its capital to generate sales. It is calculated by dividing total sales by the average capital employed. A higher ratio indicates better efficiency in using capital to produce revenue.

Finance Manager financial management

Ques:- Differentiate Cumulative & Non-cumulative shares

Asked In :- Tally Solutions, CMAT, DreamGains, Eton, IIRM, QMS, Sobha Developers, TFT, SBI Life Insurance, Canara HSBC Oriental Bank of Commerce Life Insurance Co,

Right Answer:
Cumulative shares are preferred shares that accumulate unpaid dividends, which must be paid out before any dividends are distributed to common shareholders. Non-cumulative shares, on the other hand, do not accumulate unpaid dividends; if a dividend is not declared in a given period, shareholders do not receive it in the future.

Finance Manager financial management

Ques:- Why historical costs have no managerial use?

Asked In :- Wellness Forever, Everest Bank, Fluor Daniel, Pradan, THDC, NISM, Arohan Financial, Janus Henderson Investors, Nordea Bank, Coco Fresh Tea,

Right Answer:
Historical costs have no managerial use because they do not reflect current market conditions or future economic realities, making them less relevant for decision-making and strategic planning.

Finance Manager financial management

Ques:- Define capitalization? What is its importance?

Asked In :- AJACKUS, GACL, Junior Assistant, Tax Assistant, Expeditors International (India), Janus Henderson Investors, OSFI, Wexford County Council, Midland Microfinance, Nigerian Breweries,

Right Answer:
Capitalization refers to the total amount of funds used to finance a company's operations, including debt and equity. It is important because it affects a company's financial structure, cost of capital, and ability to invest in growth opportunities.

Finance Manager financial management

Ques:- What are limited liability companies? What are its two types?

Asked In :- Bitla, Tax Assistant, Godrej Consumer Products, Bharat Financial Inclusion, Sage Intacct, Medline Industries, Think Analytics, Harrisons Malayalam, Vertu Motors, Village Hotel Club,

Right Answer:
Limited liability companies (LLCs) are business structures that combine the benefits of a corporation and a partnership. They provide limited liability protection to their owners, meaning personal assets are protected from business debts and liabilities. The two types of LLCs are:

1. Single-member LLC: Owned by one individual or entity.
2. Multi-member LLC: Owned by two or more individuals or entities.

Finance Manager financial management

Ques:- What can a company do with the profits it earns?

Asked In :- Williams Lea India, Sobha Developers, Worley Parsons, Awign Enterprises, Jiva Ayurveda, Bidfood, Faithful + Gould, the light cinema, NSL Consolidated, Bristol Healthcare Services,

Right Answer:
A company can reinvest the profits back into the business, distribute them as dividends to shareholders, pay down debt, save for future expenses, or use them for acquisitions or investments.

Finance Manager financial management

Ques:- What is composite cost of capital? Explain the process to compute it?

Asked In :- Booker Wholesale, DataCore, IMFA, Joyalukkas, NACL, Borosil Glass Works, S S Kothari Mehta & Co, Gleneagles Hotel, Robins & Day, Nordea Bank,

Right Answer:
The composite cost of capital, also known as the weighted average cost of capital (WACC), is the average rate of return a company is expected to pay its security holders to finance its assets.

To compute it, follow these steps:

1. Determine the cost of each component of capital (debt, equity, preferred stock).
2. Calculate the proportion of each component in the overall capital structure.
3. Multiply the cost of each component by its respective proportion.
4. Sum these values to get the WACC.

The formula is:
WACC = (E/V * Re) + (D/V * Rd * (1 - Tc))
Where:
E = market value of equity
D = market value of debt
V = E + D (total market value of the firm's financing)
Re = cost of equity
Rd = cost of debt
Tc = corporate tax rate.

Finance Manager financial management

Ques:- List out the advantages and disadvantages of proprietary firms?

Asked In :- Cummins India, Shakti Pumps, Eastman Chemical, TFT, iCliniq, Suryoday Small Finance Bank, Godrej Consumer Products, Mansukh Securities & Finance, Bharat Financial Inclusion, India YAMAHA Motor,

Right Answer:
**Advantages of Proprietary Firms:**
1. Easy to set up and operate.
2. Full control and decision-making power for the owner.
3. Simple tax structure; profits are taxed as personal income.
4. Minimal regulatory requirements.
5. Direct access to profits.

**Disadvantages of Proprietary Firms:**
1. Unlimited liability; personal assets are at risk.
2. Limited capital raising options.
3. Difficulty in transferring ownership.
4. Limited expertise; relies heavily on the owner's skills.
5. Continuity issues; business may cease if the owner dies or withdraws.

Finance Manager financial management

Ques:- What is float in receivables management?

Asked In :- LIGHT PHARMA, AvenDATA GmbH, DSVV, GACL, IIRM, KSBC, Adairs, Godrej Consumer Products, edwisor, Scorpio Tankers,

Right Answer:
Float in receivables management refers to the time it takes for a payment to be processed and reflected in the company's accounts after it has been received. It includes the period from when a customer sends a payment until the funds are available for use by the company.

Finance Manager financial management

Ques:- What do you mean by credit terms? What are its various aspects?

Asked In :- Solitaire Infosys, ISKPRO, Basware India, NISC Exports Services (p), Everest Bank, Cleartrip, CARE Ratings, FIAT India Automobiles, PVR, CSTEP,

Right Answer:
Credit terms refer to the conditions under which a seller allows a buyer to purchase goods or services on credit. The various aspects of credit terms include:

1. **Payment Period**: The time frame within which the buyer must pay the seller (e.g., 30 days, 60 days).
2. **Discounts**: Any early payment discounts offered (e.g., 2/10 net 30 means a 2% discount if paid within 10 days).
3. **Interest Rates**: The interest charged on overdue payments.
4. **Credit Limit**: The maximum amount of credit extended to the buyer.
5. **Payment Methods**: Accepted forms of payment (e.g., cash, check, electronic transfer).

Finance Manager financial management

Ques:- Explain management of cash?

Asked In :- Wellness Forever, Mother Dairy, UBA Bank, Bowlero Corp, HexaCorp, Estee Advisors, India Shelter Finance, Vertu Motors, SAICA, Withers Worldwide,

Right Answer:
Management of cash involves monitoring and controlling a company's cash flow to ensure it has enough liquidity to meet its obligations. This includes forecasting cash needs, managing cash inflows and outflows, optimizing cash reserves, and investing excess cash wisely to maximize returns while minimizing risks.

Finance Manager financial management

Ques:- What are the various forms in which a company may carry the inventory?

Asked In :- Solitaire Infosys, First American Corporation, India Cements, KKR, Sobha Developers, FCI CCM, Soho House, Dutch-Bangla Bank, Bull Machines, The Hasti Co-Op Bank,

Right Answer:
A company may carry inventory in the following forms:

1. Raw materials
2. Work-in-progress (WIP)
3. Finished goods
4. Maintenance, repair, and operations (MRO) supplies
5. Goods in transit

Finance Manager financial management

Ques:- Explain opportunity cost and differential cost?

Asked In :- AJACKUS, Medline Industries India, Cadbury, PRAN-RFL, Fino Payment Bank, FL Smidth, Janus Henderson Investors, AllOptions, HWL Ebsworth, Netwealth Investments,

Right Answer:
Opportunity cost is the value of the next best alternative that is foregone when making a decision. Differential cost, on the other hand, refers to the difference in cost between two alternatives when making a decision.

financial management

Ques:- You are serving with Sify from last 10yrs. Now why you want to leave?

Asked In :- MAHINDRA HOLIDAYS AND RESORTS INDIA LIMITED, Finacus Solutions, Tally Solutions, BOM, HSCL, ITDC India Tourism Development Corporation, Sumeru, Novopay Solutions, Zaggle, MMS Holdings,

Right Answer:
I am looking for new challenges and opportunities for growth that align with my career goals.

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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