ICICI Bank Credit Manager Interview Questions, Process, and Tips for Freshers

Ideal debt equity ratio varies by industry and company, but generally ranges from 0.5 to 2.

• Debt equity ratio is a measure of a company's financial leverage.

• It compares a company's total debt to its total equity.

• A higher debt equity ratio indicates higher financial risk.

• Ideal debt equity ratio varies by industry and company, but generally ranges from 0.5 to 2.

• For example, a technology company may have a higher debt equi...read more

The recent budget focuses on healthcare, infrastructure, and digitalization.

• Increased allocation for healthcare sector

• Focus on building new highways and railways

• Investment in digital infrastructure

• Reduction in customs duty on certain products

• Introduction of new tax regime for small businesses

Components of balance sheet include assets, liabilities, and equity.

• Assets: resources owned by the company such as cash, inventory, and property

• Liabilities: debts owed by the company such as loans and accounts payable

• Equity: the residual interest in the assets of the company after liabilities are deducted

• Examples: cash, accounts receivable, inventory, accounts payable, long-term debt, common stock, retained earnings

Working capital is the difference between current assets and current liabilities.

• Working capital is the amount of money a company has available to fund its day-to-day operations.

• It is calculated by subtracting current liabilities from current assets.

• Positive working capital means a company has enough funds to cover its short-term obligations.

• Negative working capital means a company may struggle to pay its bills on time...read more

Working capital can be financed through various methods.

• Short-term loans from banks or financial institutions

• Trade credit from suppliers

• Factoring or invoice discounting

• Inventory financing

• Receivables financing

• Crowdfunding or peer-to-peer lending

• Sale of assets

• Equity financing

• Leasing or renting of equipment

• Negotiating extended payment terms with customers

Working capital can be calculated using various methods.

• The Current Ratio method compares current assets to current liabilities.

• The Quick Ratio method excludes inventory from current assets.

• The Operating Cycle method considers the time it takes to convert inventory into cash.

• The Cash Conversion Cycle method combines the operating cycle with the time it takes to collect receivables.

• The Gross Working Capital method calcu...read more

Liquidity ratios measure a company's ability to meet short-term obligations.

• Current ratio: current assets divided by current liabilities

• Quick ratio: (current assets - inventory) divided by current liabilities

• Cash ratio: cash and cash equivalents divided by current liabilities

• Operating cash flow ratio: operating cash flow divided by current liabilities

• Net working capital ratio: current assets minus current liabilities

• Ac...read more