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Sdp Interview Questions and Answers
Ques:- Soybeans are a commodity product. A soybean manufacturer, which processes soybeans for food and energy. 80% of production is for food, 20% is for energy. The soybeans are processes in North America, but majority of energy demand today is in Asia/Pacific. The CEO has hired you to understand what is the most efficient method of delivering the product to Asia. You need to decide whether to process all in North America and then ship to Asia/Pacific, or ship raw to Asia/Pacific and then process.
Right Answer:
To determine the most efficient method of delivering soybeans to Asia/Pacific, you should conduct a cost analysis comparing the expenses of processing in North America versus shipping raw soybeans for processing in Asia/Pacific. Consider factors such as transportation costs, processing costs, tariffs, and demand in the target market. If processing in North America and shipping is cheaper overall, choose that option; if shipping raw soybeans and processing in Asia/Pacific is more cost-effective, opt for that.
Ques:- A man works on the 10th floor and takes the elevator down to ground level at the end of the day. Yet every morning, he only takes the elevator to the 7th floor, even when in a hurry. But he goes all the way to the 10th floor when others are in the elevator with him or it is a rainy day. Why?
Right Answer:
The man is short and can only reach the button for the 7th floor. He can reach the button for the 10th floor when others are with him or when it's rainy and he uses an umbrella to press it.
Ques:- Your company installed an ERP system 3 years ago, spending a cumulative $100M to do so. The CEO asks you, was this a financially sound investment?
Right Answer:
To determine if the ERP system was a financially sound investment, we need to analyze the return on investment (ROI). We should compare the cumulative benefits gained from the ERP system over the past 3 years against the $100M spent. If the benefits exceed $100M, it was a sound investment; if not, it was not financially sound.
Ques:- You have been called in by an accounting firm that is experiencing declining profitability in its auditing operation. What levers would you push to help improve profitability?
Right Answer:
1. Analyze and streamline processes to reduce inefficiencies.
2. Invest in technology to automate repetitive tasks.
3. Train staff to improve skills and productivity.
4. Review pricing strategies and adjust fees if necessary.
5. Focus on high-value clients and services.
6. Enhance marketing efforts to attract new clients.
7. Monitor and control costs more effectively.
8. Implement performance metrics to track and improve productivity.
Ques:- The year is 1980, your client has invented a new piece of office equipment called a fax machine. They are debating whether or not to invest in manufacturing and marketing this product. What factors should they consider and should the launch it or not launch it and why?
Right Answer:
They should consider market demand for fax machines, competition, production costs, potential pricing, target audience, and technological trends. If there is a significant demand and they can produce it at a competitive price, they should launch it; otherwise, they should hold off.
Ques:- Tell the difference between Physical inventory and Cycle counting and which process is better ? and why?
Right Answer:
Physical inventory involves counting all inventory items at once, usually at the end of a financial period, while cycle counting is a method of counting a subset of inventory on a regular basis throughout the year. Cycle counting is generally considered better because it allows for more frequent accuracy checks, minimizes disruption to operations, and helps identify discrepancies in real-time.
Ques:- What are the different Inventory analysis ? How do you do ABC, XYZ and FSN analysis?
Right Answer:
The different types of inventory analysis include:

1. **ABC Analysis**: This method categorizes inventory into three classes (A, B, and C) based on their importance.
- A items are high-value but low-quantity (typically 70-80% of value).
- B items are moderate in both value and quantity.
- C items are low-value but high-quantity (typically 10-20% of value).
The analysis is done by calculating the annual consumption value of each item and ranking them accordingly.

2. **XYZ Analysis**: This method classifies inventory based on demand variability.
- X items have stable demand.
- Y items have moderate variability in demand.
- Z items have highly variable or unpredictable demand.
The analysis is performed by assessing the demand pattern of each item over a specific period.

3. **FSN Analysis**: This categorizes inventory based on the movement of items.
- F (Fast-moving)
Ques:- What knowledge do you have about the services offered by our company?
Right Answer:
I am aware that your company offers a range of services including inventory management, supply chain optimization, and financial accounting solutions. You focus on enhancing operational efficiency and providing accurate financial reporting to support business growth.
Ques:- How many pay commissions have been set up in India post-independence?
Right Answer:
There have been 7 pay commissions set up in India post-independence.
Ques:- What is Bill Of material what information it contains?
Right Answer:
A Bill of Materials (BOM) is a comprehensive list of all the materials, components, and assemblies required to manufacture a product. It typically contains information such as part numbers, descriptions, quantities, units of measure, and the hierarchy of components.
Ques:- What role does adaptability play in problem-solving and decision-making
Right Answer:
Adaptability allows individuals to adjust their approach when faced with new information or changing circumstances, leading to more effective problem-solving and decision-making. It enables quick responses to unexpected challenges and fosters creative solutions by considering multiple perspectives.
Ques:- How do you stay positive when faced with uncertainty or unexpected challenges
Right Answer:
I stay positive by focusing on what I can control, maintaining a flexible mindset, seeking support from others, and viewing challenges as opportunities for growth and learning.
Ques:- How do you approach adapting to new company cultures or working with diverse teams
Right Answer:
I approach adapting to new company cultures by observing and understanding the values and norms of the organization. I actively listen to my colleagues, ask questions, and seek feedback to align my work style with the team. When working with diverse teams, I embrace different perspectives, promote open communication, and foster an inclusive environment to ensure everyone feels valued and heard.
Ques:- How do you handle shifting priorities or sudden changes in project requirements
Right Answer:
I handle shifting priorities by staying flexible and open to change. I prioritize tasks based on the new requirements, communicate with my team to ensure everyone is aligned, and adjust my workflow to accommodate the changes while maintaining focus on project goals.
Ques:- How do you manage working on projects with new technology or tools you’re not familiar with
Right Answer:
I approach new technologies by first researching and understanding the basics through documentation and tutorials. I then practice using the tools in small projects or exercises to gain hands-on experience. Additionally, I seek help from colleagues or online communities when needed, and I stay adaptable by being open to learning and adjusting my approach as I gain more knowledge.
Ques:- What are the various types of preference shares?
Right Answer:
The various types of preference shares are:

1. **Cumulative Preference Shares** - Accumulate unpaid dividends.
2. **Non-Cumulative Preference Shares** - Do not accumulate unpaid dividends.
3. **Participating Preference Shares** - Entitled to additional dividends beyond fixed rates.
4. **Non-Participating Preference Shares** - Receive only fixed dividends without additional participation.
5. **Convertible Preference Shares** - Can be converted into equity shares.
6. **Redeemable Preference Shares** - Can be redeemed after a specified period.
7. **Irredeemable Preference Shares** - Cannot be redeemed and are issued indefinitely.
Ques:- Explain Operating Leverage. How is it computed? What does high/low operating leverage indicate?
Right Answer:
Operating leverage measures the proportion of fixed costs in a company's cost structure. It is computed using the formula:

Operating Leverage = Contribution Margin / Operating Income

High operating leverage indicates that a company has a higher proportion of fixed costs, which can lead to greater profits with increased sales but also greater losses with decreased sales. Low operating leverage suggests a higher proportion of variable costs, leading to more stable profits regardless of sales fluctuations.
Ques:- Define capitalization? What is its importance?
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.
Ques:- Explain opportunity cost and differential cost?
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.
Ques:- What are profitability group ratios in financial analysis?
Right Answer:

Profitability group ratios measure a company’s ability to generate profit relative to sales, assets, or equity. Common examples include gross profit margin, net profit margin, return on assets (ROA), and return on equity (ROE). These ratios help assess financial performance and efficiency.

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