72062487 Finance Interview Questions

8/13/2019 72062487 Finance Interview Questions

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17. Che='e: a $i%% o! e9chan#e ,ra"n on a peci!ie, $an2er an, paa$%e on ,eman,.

1. Stem o! $oo2 2eepin#:

A. in#%e entr tem

B. ,o'$%e entr tem

& %o acco'nt.(,e$it $a%ance)

3. *i%api,ation: the term ,i%api,ation to ,ama#e ,one to a $'i%,in# or other propert ,'rin# tenanc.

6. Capita% emp%oe,: The term capita% emp%oe, mean 'm o! tota% %on# term !'n, emp%oe, in the $'ine. i.e.

(hare capita%? reer/e > 'rp%' ?%on# term %oan @ (non $'ine aet ? !ictitio' aet)

7. E='it hare: Thoe hare "hich are not ha/in# pre!. ri#ht are ca%%e, e='it hare > rea% o"ner o! the !irm

a"e%%a poe /otin# ri#ht.


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. Pre!.hare: Thoe hare "hich are carrin# the pre!.ri#ht i ca%%e, pre!. hare

1Pre!.ri#ht in repect o! !i9e, ,i/i,en,.

&Pre!.ri#ht to repament o! capita% in the e/en o! compan "in,in# 'p.


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. Pri/ate compan: A pri/ate co. i "hich $ it AOA:

1Retrict the ri#ht o! the mem$er to tran!er o! hare

&imit the no. o! mem$er


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61. Reer/e !'n,: Thee !'n, are maintaine, !or !'t're in/etment8re='irement etc.-

6&. n,ic%oe, reer/e: Sometime a reer/e i create, $'t it i,entit i mer#e, "ith ome other a8c or #ro'p o!

acco'nt o that the e9itence o! the reer/e i not 2no"n 'ch reer/e i ca%%e, an 'n,ic%oe, reer/e.

Financial Management terms,

6. Financia% mana#ement: It ,ea% "ith proc'rement o! !'n, an, their e!!ecti/e 'ti%ization in $'ine.

6. O$;ecti/e o! !inancia% mana#ement: Financia% mana#ement ha/in# t"o o$;ecti/e that I:

1. Pro!it ma9imization: the !inance mana#er ha to ma2e hi ,eciion in a manner o that the pro!it o! the concern ar

ma9imize,.

&. Hea%th ma9imization: "ea%th ma9imization mean the o$;ecti/e o! a !irm ho'%, $e to ma9imize it /a%'e or "ea%th- o

/a%'e o! a !irm i repreente, $ the mar2et price o! it common toc2.

6. F'nction o! !inancia% mana#er:

1In/etment ,eciion

&*i/i,en, ,eciion

Finance ,eciion

Cah mana#ement ,eciion

Per!ormance e/a%'ation

3Mar2et impact ana%i

63. Time /a%'e o! mone: It mean that "orth o! a r'pee recei/e, to,a i ,i!!erent !rom the "orth o! a r'pee to $e

recei/e, in !'t're.

66. Capita% tr'ct're: it re!er to the mi9 o! o'rce !rom "here the %on#Dterm !'n, re='ire, in a $'ine ma $e

raie, in other "or,- it re!er to the proportion o! ,e$t- pre!erence capita% an, e='it capita%.

67. Optim'm capita% tr'ct're: capita% tr'ct're i optim'm "hen the !irm ha a com$ination o! e='it an, ,e$t o that

the "ea%th o! the !irm i ma9im'm.

6. HACC: It ,enote "ei#hte, a/era#e cot o! capita%. It i ,e!ine, a the o/era%% cot o! capita% comp'te, $ re!erence

to the proportion o! each component o! capita% a "ei#ht.

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each o! thee %ocation an, open %oca% co%%ection centre.

7. Mar2eta$%e ec'ritie: 'rp%' cah can $e in/ete, in hort term intr'ment in or,er to earn interet.


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!rom mem$er o! the p'$%ic an, hareho%,er. It ha the mat'rit perio, o! 3 month to ear.

1


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1&. Cot: The amo'nt o! e9pen,it're inc'rre, on to a #i/en thin#.

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cot o! carr.

1. Initia% mar#in: The amo'nt that m't $e ,epoite, in the mar#in a8c at the time o! !irt entere, into !'t're contrac

i 2no"n a initia% mar#in.

1. Maintenance mar#in: Thi i ome "hat %o"er than initia% mar#in.

1. Mar2 to mar2et: In !'t're mar2et- at the en, o! the each tra,in# ,a- the mar#in a8c i a,;'te, to re!%ect the

in/etor #ain or %o ,epen,in# 'pon the !'t're e%%in# price. Thi i ca%%e, mar2 to mar2et.

13. Ba2et : Ba2et option are option on port!o%io o! 'n,er%in# aet.

16. S"ap: S"ap are pri/ate a#reement $et"een t"o partie to e9chan#e cah !%o" in the !'t're accor,in# to a pre

a#ree, !orm'%a.

17. Impact cot: It i cot it i mea're o! %i='i,it o! the mar2et. It re!%ect the cot !ace, "hen act'a%% tra,in# in

in,e9.

1. 5e,#in#: he,#in# mean minimize the ri2.

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a%e are c%oe,. An !'rther tranaction !or $'in# the 'nit or rep'rchain# them- happen- in the econ,ar mar2et.

16&. *i/i,en, option: In/etor- "ho chooe a ,i/i,en, on their in/etment- "i%% recei/e ,i/i,en, !rom the MF- a "hen

'ch ,i/i,en, are ,ec%are,.

16. 4ro"th option: in/etor "ho ,o not re='ire perio,ic income ,itri$'tion can $e chooe the #ro"th option.

16. E='it !'n,: e='it !'n, are thoe that in/et preD,ominant% in e='it hare o! compan.

16. Tpe o! e='it !'n,:

1Simp%e e='it !'n,

&Primar mar2et !'n,

Sectora% !'n,

In,e9 !'n,

163. Sectora% !'n,: Thee !'n, are chooen to in/et in one or more choen ector o! the e='it mar2et.

166. In,e9 !'n,: F'n, mana#er ta2e a /ie" on companie that are e9pecte, to per!orm "e%%- an, in/et in thee

companie

167. *e$t !'n,: *e$t !'n, are thoe that are preD,ominant% in/et in ,e$t ec'ritie.

16. i='i, !'n,: *e$t !'n, in/et on% in intr'ment "ith mat'ritie %e than one ear.

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Form'%a : Mar2et price o! hare (MPS) K 1


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Form'%a : *i/i,en, per E='it Share K 1'rp%' ?%on# term %oan @(non $'ine aet ? !ictitio' aet).

Operatin# pro!it mean pro!it $e!ore interet an, ta9

&1 . Fi9e, Interet Co/er ratio : the ratio i /er important !rom the %en,er point o! /ie". It in,icate "hether th

$'ine "o'%, earn '!!icient pro!it to pa perio,ica%% the interet char#e.

Form'%a : Income $e!ore interet an, Ta9

Interet Char#e

&&< . Fi9e, *i/i,en, Co/er ratio: Thi ratio i important !or pre!erence hareho%,er entit%e, to #et ,i/i,en, at a !i9e,

rate in priorit to other hareho%,er.

Form'%a : Net Pro!it a!ter Interet an, Ta9

Pre!erence *i/i,en,

&&1. *e$t Ser/ice Co/era#e ratio: Thi ratio i e9p%aine, a$i%it o! a compan to ma2e pament o! principa% amo'nt a%o

on time.

Form'%a : Net pro!it $e!ore interet an, ta9

Interet ? Principa% pament inta%%ment

1Ta9 rate

&&&. Proprietar ratio: It i a /ariant o! ,e$tDe='it ratio . It eta$%ihe re%ationhip $et"een the proprietor !'n, an,

the tota% tan#i$%e aet.

Form'%a : Shareho%,er !'n,

Tota% tan#i$%e aet

&&. *i!!erence $et"een ;oint /ent're an, partner hip :

1In ;oint /ent're the $'ine i carrie, on "itho't 'in# a !irm name-

In the partnerhip- the $'ine i carrie, on 'n,er a !irm name.

&In the ;oint /ent're- the $'ine tranaction are recor,e, 'n,er cah temIn the partnerhip- the $'ine tranaction are recor,e, 'n,er mercanti%e tem.

In the ;oint /ent're- pro!it an, %o i acertaine, on comp%etion o! the /ent're

In the partner hip - pro!it an, %o i acertaine, at the en, o! each ear.

In the ;oint /ent're- it i con!ine, to a partic'%ar operation an, it i temporar.

In the partnerhip- it i con!ine, to a partic'%ar operation an, it i permanent

.

&&. Meanin# o! Hor2in# capita%: The !'n, a/ai%a$%e !or con,'ctin# ,a to ,a operation o! an enterprie. A%o

repreente, $ the e9ce o! c'rrent aet o/er c'rrent %ia$i%itie .

&&. Concept o! acco'ntin#: (in ,etai%)

1.B'ine entit concept: D Accor,in# to thi concept- the $'ine i treate, a a eparate entit ,itinct !rom it


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o"ner an, other.

&.4oin# concern concept :D Accor,in# to thi concept- it i a'me, that a $'ine ha a reaona$%e e9pectation o!

contin'in# $'ine at a pro!it !or an in,e!inite perio, o! time.

.Mone mea'rement concept :D Thi concept a that the acco'ntin# recor, on% thoe tranaction "hich can $e

e9pree, in term o! mone on%.

.Cot concept :DAccor,in# to thi concept- an aet i recor,e, in the $oo2 at the price pai, to ac='ire it an, that

thi cot i the $ai !or a%% '$e='ent acco'ntin# !or the aet.

.*'a% apect concept :D In e/er tranaction- there "i%% $e t"o apect @ the recei/in# apect an, the #i/in# apect

$oth are recor,e, $ ,e$itin# one acco'nt an, cre,itin# another acco'nt. Thi i ca%%e, ,o'$%e entr.

3.Acco'ntin# perio, concept :D It mean the !ina% acco'nt m't $e prepare, on a perio,ic $ai. Norma%%

acco'ntin# perio, a,opte, i one ear- more than thi perio, re,'ce the 'ti%it o! acco'ntin# ,ata.

6.Rea%ization concept :D Accor,in# to thi concept- re/en'e i coni,ere, a $ein# earne, on the ,ata "hich it i

rea%ize,- i.e.- the ,ate "hen the propert in #oo, pae the $'er an, he $ecome %e#a%% %ia$%e to pa.

7.Materia%it concept :D It i a one o! the acco'ntin# princip%e- a per on% important in!ormation "i%% $e ta2en- an,

'n important in!ormation "i%% $e i#nore, in the preparation o! the !inancia% tatement.

.Matchin# concept :D The cot or e9pene o! a $'ine o! a partic'%ar perio, are compare, "ith the re/en'e o! the

perio, in or,er to acertain the net pro!it an, %o.

1 %oe acco'nt an, $a%ance heet.

&&. Ban2r'pt : A tatement in "hich a !irm i 'na$%e to meet it o$%i#ation an, hence- it i aet are 'rren,ere, to

co'rt !or a,minitration

&< . eae : eae i a contract $et"een to partie 'n,er the contract- the o"ner o! the aet #i/e the ri#ht to 'e the

aet to the 'er o/er an a#ree, perio, o! the time !or a coni,eration

&1. Opport'nit cot : The cot aociate, "ith not ,oin# omethin#.

&&. B',#etin# : The term $',#etin# i 'e, !or preparin# $',#et an, other pro,'cer !or p%annin#-coDor,ination-an,

contro% o! $'ine enterprie.

&. Capita% : The term capita% re!er to the tota% in/etment o! compan in mone- tan#i$%e an, intan#i$%e aet. It i th

tota% "ea%th o! a compan.

&. Capita%ization : It i the 'm o! the par /a%'e o! toc2 an, $on, o't tan,in#.&. O/er capita%ization : Hhen a $'ine i 'na$%e to earn !air rate on it o'ttan,in# ec'ritie.

&3. n,er capita%ization : Hhen a $'ine i a$%e to earn !air rate or o/er rate on it i o'ttan,in# ec'ritie.

&6. Capita% #earin# : The term capita% #earin# re!er to the re%ationhip $et"een e='it an, %on# term ,e$t.

&7. Cot o! capita% : It mean the minim'm rate o! ret'rn e9pecte, $ it in/etment.

&. Cah ,i/i,en, : The pament o! ,i/i,en, in cah

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On the other han,- cre,it car, i a 2in, o! cre,it o' #et !rom the $an2 a the name '##et. E/en i! o' ha/e no

'!!icient mone in o'r $an2- o' can ta2e mone or o' can $' an artic%e 'in# cre,it car, 'p to the cre,it %imit

Qo' can pa $ac2 the mone to the $an2 a!ter a #i/en perio, o! time.

He can 'e ,e$it car, a "e%% a cre,it car, !or hoppin# on%ine or $'in# an artic%e !rom the hop. Qo' a%o can pa

te%ephone $i%%- c'rrent $i%% an, e/en rechar#e o'r prepai, mo$i%e 'in# thee car, on%ine. Man $an2 #i/e thee

!aci%itie.

&.difference betwen accounting and finance Acco'ntin# i $aica%% the tem o! ma2in# recor,- /eri!ication an, reportin# o! /a%'e o! aet- %ia$i%itie- e9pene

an, income in the acco'nt $oo2. The tranaction are pote, chrono%o#ica%% to recor, chan#e in /a%'e o! aet an,

%ia$i%itie.

On the other han,- Finance re!er to the time- mone an, ri2 aociate, "ith a peci!ic $'ine. Finance i ,i!!eren

$eca'e it "or2 on theacco'ntin#in!ormation to pre,ict !'t're tren, or to ma2e ,eciion a$o't the !'t're.

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72062487 Finance Interview Questions