TCS Financial Analyst Interview Questions and Answers

Depreciation is the decrease in value of tangible assets over time, while amortization is the decrease in value of intangible assets over time. Capital gains are profits made from selling assets at a higher price than their purchase price.

• Depreciation applies to tangible assets like buildings, machinery, and vehicles, while amortization applies to intangible assets like patents, copyrights, and trademarks.

• Depreciation and amortization are both methods of allocating the cost o...read more

Gross ratio is a financial ratio that measures the proportion of a company's revenue that is used to cover its operating expenses.

• Gross ratio is calculated by dividing the cost of goods sold by the total revenue.

• It helps in determining the efficiency of a company's operations.

• A higher gross ratio indicates that a company is able to generate more revenue from its operations.

• Debenture is a type of long-term debt instrument issued by companies to raise funds.

• It is a form of a lo...read more

Goodwill is an intangible asset that represents the value of a company's reputation, brand, and customer relationships.

• Goodwill is recorded on a company's balance sheet when it acquires another company for a price higher than the fair market value of its net assets.

• It is considered an intangible asset because it cannot be physically touched or seen.

• Goodwill can arise from factors such as strong customer loyalty, brand recognition, patents, and proprietary technology.

• It is typ...read more

Equity ratios are used to evaluate a company's financial health and performance by measuring its equity relative to other financial metrics.

• The formula for equity ratio is Total Equity / Total Assets.

• Equity ratios help investors and analysts assess a company's leverage and risk.

• For example, if a company has total equity of $500,000 and total assets of $1,000,000, the equity ratio would be 0.5 or 50%.

Depreciation is the systematic allocation of the cost of an asset over its useful life.

• Depreciation is used to account for the wear and tear, obsolescence, or decrease in value of an asset over time.

• It helps in matching the cost of the asset with the revenue it generates during its useful life.

• Depreciation is important for financial reporting and tax purposes.

• There are various methods of calculating depreciation, such as straight-line, declining balance, and units of producti...read more

Market conditions can also be influenced by geopolitical events, technological advancements, and regulatory changes.

• Geopolitical events such as trade wars or political instability can impact market conditions

• Technological advancements like the rise of e-commerce or artificial intelligence can create new opportunities and challenges in the market

• Regulatory changes such as tax reforms or new legislation can affect market dynamics

Depreciation is the allocation of the cost of a tangible asset over its useful life.

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

• It reflects the wear and tear, obsolescence, or decrease in value of the asset.

• Common methods of calculating depreciation include straight-line, double declining balance, and units of production.

• Example: A company purchases a machine for $10,000 with a useful life of 5 years. Using straight-line depreciation, the a...read more

The golden rule of accounting is to record every financial transaction accurately and in a timely manner.

• The golden rule of accounting is also known as the principle of double-entry bookkeeping.

• It states that for every debit entry, there must be a corresponding credit entry of equal value.

• This ensures that the accounting equation (Assets = Liabilities + Equity) remains in balance.

• For example, if a company purchases inventory for $1,000, it would record a debit entry of $1,000...read more