10+ Guruvayur Devaswom Interview Questions and Answers

One thing can impact all three statements in financial analysis.

• A change in revenue can affect net income, balance sheet, and cash flow statement.

• An increase in accounts receivable can decrease cash flow from operations and increase the balance sheet's current assets.

• A decrease in inventory can increase cash flow from operations and decrease the balance sheet's current assets.

• A change in depreciation expense can affect net income and the balance sheet's property, plant, and e...read more

The three financial statements are interconnected and provide information about a company's financial performance.

• The income statement shows the company's revenue, expenses, and net income or loss for a specific period.

• The balance sheet shows the company's assets, liabilities, and equity at a specific point in time.

• The cash flow statement shows the company's cash inflows and outflows for a specific period.

• The net income from the income statement is used to calculate the retai...read more

Key Performance Indicators (KPIs) vary across industries based on their specific goals and objectives.

• Retail: Sales per square foot, inventory turnover rate

• Technology: Monthly active users, customer acquisition cost

• Manufacturing: Overall equipment effectiveness, on-time delivery rate

• Finance: Return on investment, net profit margin

• Healthcare: Patient satisfaction score, readmission rate

The three financial statements (Income Statement, Balance Sheet, Cash Flow Statement) are linked through the flow of information and transactions between them.

• The Net Income from the Income Statement flows into the Equity section of the Balance Sheet.

• Changes in the Balance Sheet accounts impact the Cash Flow Statement.

• The ending cash balance on the Cash Flow Statement should match the cash amount on the Balance Sheet.

EPS stands for Earnings Per Share, a financial metric that indicates the portion of a company's profit allocated to each outstanding share of common stock.

• EPS is calculated by dividing a company's net income by the number of outstanding shares of common stock.

• It is an important indicator of a company's profitability and is often used by investors to evaluate a company's performance.

• Higher EPS indicates higher profitability and potential for growth, while lower EPS may signal ...read more

The three statements refer to the income statement, balance sheet, and cash flow statement in financial reporting.

• Income statement shows a company's revenues and expenses over a period of time.

• Balance sheet provides a snapshot of a company's financial position at a specific point in time.

• Cash flow statement reports a company's cash inflows and outflows during a period.

I will project revenue by analyzing historical data, market trends, and sales forecasts.

• Analyze historical revenue data to identify patterns and trends

• Consider market trends and economic indicators that may impact revenue

• Utilize sales forecasts and pipeline data to predict future revenue

• Take into account any upcoming product launches or marketing campaigns that could affect revenue

• Adjust projections based on any external factors such as competition or regulatory changes

DCF stands for Discounted Cash Flow, a valuation method used to estimate the value of an investment based on its future cash flows.

• DCF is a financial modeling technique used to determine the present value of an investment by discounting its expected future cash flows.

• It involves forecasting future cash flows, determining a discount rate, and calculating the net present value.

• DCF is commonly used in investment analysis to assess the attractiveness of an investment opportunity....read more

Beta is a measure of a stock's volatility in relation to the market.

• Beta is used to assess the risk of a stock compared to the overall market.

• A beta of 1 indicates the stock moves in line with the market.

• A beta greater than 1 means the stock is more volatile than the market.

• A beta less than 1 means the stock is less volatile than the market.

• Negative beta indicates an inverse relationship with the market.

Revenue drivers are factors that contribute to a company's ability to generate income.

• Sales volume

• Pricing strategy

• Market share

• Product mix

• Geographic expansion

• Cost control

• Marketing and advertising

• Mergers and acquisitions

The 3 types of statements are income statement, balance sheet, and cash flow statement.

• Income statement shows a company's revenues and expenses over a specific period of time.

• Balance sheet provides a snapshot of a company's financial position at a specific point in time.

• Cash flow statement shows how changes in balance sheet accounts and income affect cash and cash equivalents.

Amortization is the process of spreading out the cost of an asset over its useful life.

• It is a non-cash expense that reduces the value of an asset over time

• It is placed in the operating activities section of the cash flow statement

• Examples include the amortization of intangible assets like patents and trademarks

• It is different from depreciation which is used for tangible assets like buildings and equipment

Current ratio and quick ratio are financial ratios used to evaluate a company's liquidity and ability to meet short-term obligations.

• Current ratio is calculated by dividing current assets by current liabilities. It measures a company's ability to pay off its short-term liabilities with its short-term assets.

• Quick ratio, also known as acid-test ratio, is calculated by subtracting inventory from current assets and then dividing by current liabilities. It provides a more stringe...read more

KPIs are key performance indicators that measure the success of a business. Depreciation is the decrease in value of an asset over time.

• KPIs are used to track progress towards specific goals and objectives

• Examples of KPIs include revenue growth, customer satisfaction, and employee turnover rate

• Depreciation is a non-cash expense that reflects the wear and tear of an asset over time

• Examples of assets that can be depreciated include buildings, vehicles, and equipment

• Depreciation...read more

DCF valuation is a method used to estimate the value of an investment based on its expected future cash flows.

• DCF valuation involves forecasting future cash flows, determining a discount rate, and calculating the present value of those cash flows.

• It is commonly used in finance to value stocks, bonds, and other investments.

• The formula for DCF valuation is: DCF = CF1/(1+r)^1 + CF2/(1+r)^2 + ... + CFn/(1+r)^n, where CF is the cash flow and r is the discount rate.

• DCF valuation he...read more

DCF stands for Discounted Cash Flow and FCFF stands for Free Cash Flow to Firm.

• DCF is a valuation method used to estimate the value of an investment based on its expected future cash flows.

• FCFF is a measure of a company's financial performance, representing the cash that a company is able to generate after accounting for all capital expenditures.

• Both DCF and FCFF are commonly used in financial analysis and valuation.

• DCF is calculated by discounting the projected cash flows of...read more