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Trustford Interview Questions and Answers
Ques:- What is cif
Right Answer:
CIF stands for Cost, Insurance, and Freight. It is a shipping term that indicates the seller is responsible for the costs of transporting goods, including insurance and freight charges, until the goods reach the buyer's port.
Ques:- About innovation and modern trends in cost control and Purchasing
Right Answer:
Innovation and modern trends in cost control and purchasing include the use of data analytics for demand forecasting, automation of procurement processes through e-procurement systems, strategic sourcing to optimize supplier relationships, and the adoption of just-in-time inventory management to reduce holding costs. Additionally, leveraging blockchain technology for transparency and efficiency in supply chains, and implementing sustainable purchasing practices are becoming increasingly important.
Ques:- Brief description about the job applied for.
Right Answer:
The job applied for involves managing and optimizing the supply chain and logistics processes, ensuring efficient transportation, inventory management, and timely delivery of goods to meet customer demands.
Ques:- What are the different sources a company can use to meet its fund requirements?
Right Answer:

A company can meet its fund needs through:

  • Equity Capital: Issuing shares to investors

  • Debt Capital: Borrowing via loans, bonds, or debentures

  • Internal Funds: Retained earnings and reserves

  • Trade Credit: Credit from suppliers

  • Grants and Subsidies: From government or agencies

  • Venture Capital and Angel Investors: For startups and growing firms

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:- 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.

Ques:- Define Internal rate of return.
Right Answer:
The Internal Rate of Return (IRR) is the discount rate at which the net present value (NPV) of a project's cash flows equals zero. It represents the expected annual rate of return on an investment.
Ques:- What are the advantages of issuing bonus shares to the shareholders and creditors?
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.
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