40+ TresVista Interview Questions and Answers for Freshers

Answering how to show a transaction involving cash and loan in financial statements.

• The cash purchase of an asset will be shown as a decrease in cash on the cash flow statement and as an increase in assets on the balance sheet.

• The purchase made through bank loan will be shown as an increase in liabilities on the balance sheet and as an increase in cash on the cash flow statement.

• The loan taken will be shown as an increase in liabilities on the balance sheet and as an increase...read more

We subtract increase in current assets in cash flow statement under operating activities to adjust for cash inflows/outflows.

• Increase in current assets means cash is tied up in inventory, accounts receivable, etc.

• This reduces the amount of cash available for operating activities.

• Subtracting this increase adjusts for the cash inflows/outflows.

• Examples include increase in accounts receivable, inventory, prepaid expenses, etc.

Accounting entries for purchase and sale of a depreciating asset

• Purchase: Debit the asset account and credit the cash/bank account

• Purchase: Debit the depreciation expense account and credit the accumulated depreciation account

• Sale: Debit the cash/bank account and credit the asset account

• Sale: Debit the accumulated depreciation account, debit the gain/credit the loss on sale account, and credit the asset account

The average number of tea cups consumed by an Indian in a day varies widely depending on individual preferences and habits.

• Tea consumption in India is influenced by factors such as region, age, gender, and cultural practices.

• Some Indians may consume multiple cups of tea throughout the day, while others may not drink tea at all.

• In general, it is common for many Indians to have at least 1-2 cups of tea per day.

• Tea is a popular beverage in India and is often consumed during brea...read more

The three components of financial statements are income statement, balance sheet, and cash flow statement.

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

• Balance sheet provides a snapshot of the company's assets, liabilities, and shareholders' equity at a specific point in time.

• Cash flow statement reports the cash generated and used by the company during a specific period.

Prepaid expenses are costs paid in advance but not yet incurred, while depreciation is the allocation of the cost of an asset over its useful life.

• Prepaid expenses are assets representing costs that have been paid for but have not yet been used or consumed.

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

• Prepaid expenses are typically recorded as assets on the balance sheet until they are used or consumed.

• Depreciation expense is r...read more

The probability of getting at least one king while picking 2 cards from a deck at random is 15/221.

• To calculate the probability, we need to find the number of favorable outcomes and the total number of possible outcomes.

• There are 4 kings in a deck of 52 cards.

• The number of ways to choose 2 cards from a deck of 52 is given by the combination formula C(52, 2) = 1326.

• The number of ways to choose 2 cards without any king is given by the combination formula C(48, 2) = 1128.

• Therefo...read more

Components of a cash flow statement include operating activities, investing activities, and financing activities.

• Operating activities: Includes cash flows from day-to-day business operations, such as sales and expenses.

• Investing activities: Involves cash flows from the purchase and sale of long-term assets, like property or equipment.

• Financing activities: Includes cash flows related to raising or repaying capital, such as issuing stock or paying dividends.

Assets such as machinery, equipment, vehicles, buildings, and furniture are subject to depreciation.

• Machinery

• Equipment

• Vehicles

• Buildings

• Furniture

A cash flow statement typically has three sections: operating activities, investing activities, and financing activities.

• The first section shows cash flows from operating activities, such as sales revenue and expenses.

• The second section shows cash flows from investing activities, such as buying or selling assets.

• The third section shows cash flows from financing activities, such as issuing or repaying debt or equity.

• The net change in cash for the period is calculated by adding...read more

Financial statements are interrelated as they provide different perspectives of a company's financial performance.

• The income statement shows the company's revenue, expenses, and net income, which affects the balance sheet.

• The balance sheet shows the company's assets, liabilities, and equity, which affects the cash flow statement.

• The cash flow statement shows the company's cash inflows and outflows, which affects the income statement and balance sheet.

• Changes in one statement ...read more

Negative working capital is when a company's current liabilities exceed its current assets.

• It means the company may have trouble paying its short-term debts

• It can indicate efficient management of inventory and accounts receivable

• Examples include Amazon and Walmart

• It is common in industries with high inventory turnover and short payment cycles

Quick ratio formula is (Current Assets - Inventory) / Current Liabilities.

• Quick ratio is a measure of a company's ability to meet its short-term obligations.

• It is also known as the acid-test ratio.

• The formula excludes inventory from current assets as it may not be easily converted to cash.

• A quick ratio of 1:1 or higher is considered good.

• Quick ratio = (Current Assets - Inventory) / Current Liabilities.

The three basic financial statements are the 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, including assets, liabilities, and equity.

• Cash flow statement: Reports the cash generated and used by a company during a specific period of time.

DCF is a valuation method that estimates the future cash flows of a company and discounts them to their present value. WACC is the weighted average cost of capital.

• DCF stands for Discounted Cash Flow

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

• It involves projecting future cash flows, determining a discount rate, and calculating the present value of those cash flows

• WACC stands for Weighted Average Cost of Capital

• It is the ...read more

Equity value is the value of a company's shareholders' equity, while enterprise value is the total value of a company including debt and equity.

• Equity value only considers the value of a company's equity, which is calculated as the market capitalization minus net debt.

• Enterprise value takes into account both the equity and debt of a company, and is calculated as market capitalization plus debt minus cash.

• Equity value is what shareholders would receive if a company were to be ...read more

The three financial statements (income statement, balance sheet, and cash flow statement) are linked together through the flow of information and transactions.

• The income statement shows the company's revenues, expenses, and net income or loss for a specific period. It provides information on the company's profitability.

• The net income or loss from the income statement is then transferred to the balance sheet as retained earnings or accumulated deficit.

• The balance sheet provide...read more

Approximately 500 million coffee cups are sold in America in a week.

• Consider the population of America and the percentage of coffee drinkers

• Take into account the number of coffee shops and their average sales per day

• Factor in the consumption habits of Americans, such as daily coffee intake

Cash basis recognizes revenue and expenses when cash is actually received or paid, while accrual basis recognizes revenue and expenses when they are incurred.

• Cash basis only records transactions when cash is exchanged, regardless of when the revenue is earned or expenses incurred.

• Accrual basis records revenue when it is earned and expenses when they are incurred, regardless of when cash is exchanged.

• Cash basis is simpler and easier to understand, while accrual basis provides ...read more

A cash flow statement shows the inflows and outflows of cash for a specific period of time.

• The statement is divided into three sections: operating activities, investing activities, and financing activities.

• Operating activities include cash received from customers and cash paid to suppliers.

• Investing activities include cash spent on purchasing assets and cash received from selling assets.

• Financing activities include cash received from issuing stocks or bonds and cash paid for ...read more

To narrow down on an investment for the long term, one must consider various factors such as financial performance, industry trends, competitive advantage, and management quality.

• Evaluate the financial performance of the company, including revenue growth, profitability, and cash flow.

• Analyze industry trends and growth potential to identify sectors with long-term growth prospects.

• Assess the competitive advantage of the company, such as unique products or services, strong brand...read more

A diversified portfolio allocation for long-term investing

• Diversify across asset classes to reduce risk

• Consider the investor's risk tolerance and investment goals

• Allocate a portion to equities for potential growth

• Include fixed income assets for stability and income

• Consider alternative investments for diversification

• Rebalance the portfolio periodically to maintain desired allocation

The average daily water consumption within a 1 km radius of my area is approximately 500,000 liters.

• The water consumption can vary depending on the population density and availability of water sources.

• Factors such as residential, commercial, and industrial activities can influence the consumption.

• Data from local water supply authorities or surveys can provide more accurate figures.

• Examples of water consumption activities include drinking, cooking, bathing, irrigation, and ind...read more

FCF can be derived from EBIT, EBITDA, and NI by adjusting for taxes, non-cash expenses, and changes in working capital.

• To calculate FCFF from EBIT, subtract taxes and add back non-cash expenses (depreciation and amortization).

• To calculate FCFF from EBITDA, subtract taxes, add back non-cash expenses, and deduct capital expenditures.

• To calculate FCFF from NI, add back non-cash expenses, deduct taxes, and deduct changes in working capital.

• FCFF = EBIT * (1 - Tax Rate) + Depreciat...read more

The discount rate used in the DCF model is calculated by considering the risk-free rate, equity risk premium, and beta.

• The discount rate is the rate of return required by an investor to invest in a particular asset or project.

• It is calculated by adding the risk-free rate to the product of equity risk premium and beta.

• The risk-free rate represents the return on a risk-free investment, such as government bonds.

• Equity risk premium is the additional return required by investors f...read more

Private equity firms are investment firms that pool capital from investors to acquire and invest in private companies.

• Private equity firms raise funds from institutional investors, such as pension funds and endowments, as well as high-net-worth individuals.

• These firms use the raised capital to acquire ownership stakes in private companies.

• Private equity firms aim to improve the financial performance of the acquired companies and create value through operational improvements, ...read more

Free Cash Flow is calculated by subtracting capital expenditures from operating cash flow.

• Free Cash Flow (FCF) is a measure of a company's ability to generate cash after accounting for its capital expenditures.

• To calculate levered FCF, subtract interest expense and taxes from FCF.

• To calculate unlevered FCF, exclude interest expense and taxes from FCF.

• The formula for FCF is: FCF = Operating Cash Flow - Capital Expenditures.

• Operating Cash Flow can be found in the company's cash...read more

FCFF is a measure of a company's financial performance and is used in valuation to determine the value of a firm's equity.

• FCFF stands for Free Cash Flow to Firm, which represents the cash flow available to all providers of capital, both debt and equity.

• It is calculated as Operating Cash Flow minus Capital Expenditures minus Taxes plus Depreciation & Amortization.

• FCFF is used in valuation models such as Discounted Cash Flow (DCF) to estimate the intrinsic value of a company.

• By...read more

Global inflation is a complex issue with various factors influencing it.

• Global inflation is influenced by factors such as monetary policy, fiscal policy, supply and demand dynamics, and geopolitical events.

• Central banks play a crucial role in managing inflation through interest rate adjustments and other monetary measures.

• Inflation can have both positive and negative impacts on economies and individuals.

• Examples of recent global inflation scenarios include the impact of COVID...read more

Depreciation affects all three financial statements: income statement, balance sheet, and cash flow statement.

• Depreciation is an expense that reduces net income on the income statement.

• Depreciation reduces the value of assets on the balance sheet.

• Depreciation is added back to net income on the cash flow statement as it is a non-cash expense.

• Depreciation affects the calculation of key financial ratios such as return on assets and cash flow from operations.

A Discounted Cash Flow (DCF) model is a financial valuation method used to estimate the value of an investment based on its future cash flows.

• DCF models calculate the present value of expected future cash flows by discounting them using a required rate of return.

• It is commonly used in investment analysis to determine the intrinsic value of a company or project.

• The model considers the time value of money, as cash received in the future is worth less than the same amount receiv...read more

Buy side refers to firms that buy securities for investment purposes, while sell side refers to firms that sell securities to clients.

• Buy side firms include mutual funds, pension funds, and hedge funds.

• Sell side firms include investment banks, brokerages, and market makers.

• Buy side firms focus on generating returns for their clients by making investment decisions.

• Sell side firms facilitate transactions and provide services such as research and trading.

• Buy side firms typically...read more

Investment banks are financial institutions that provide various services to corporations, governments, and individuals.

• Investment banks help companies raise capital by underwriting securities offerings.

• They provide advisory services for mergers and acquisitions, helping clients with strategic decisions.

• Investment banks also engage in trading activities, buying and selling securities on behalf of clients.

• They offer research and analysis on financial markets, providing insight...read more

Different commands used in system engineering

• Command line interface (CLI) commands

• Network commands (ping, traceroute)

• File management commands (ls, cp, mv)

• Process management commands (ps, kill)

• System monitoring commands (top, htop)

• Package management commands (apt-get, yum)

My strengths include strong problem-solving skills, attention to detail, and the ability to work well in a team.

• Strong problem-solving skills - I enjoy analyzing complex issues and finding effective solutions.

• Attention to detail - I am meticulous in my work and strive for accuracy in all tasks.

• Teamwork - I collaborate effectively with colleagues to achieve common goals.

An IP address is a unique numerical label assigned to each device connected to a computer network.

• IP addresses are used to identify and locate devices on a network.

• There are two types of IP addresses - IPv4 and IPv6.

• IPv4 addresses are written in the format of four sets of numbers separated by periods (e.g. 192.168.1.1).

• IPv6 addresses are written in a hexadecimal format and are longer than IPv4 addresses.

• IP addresses can be static (manually assigned) or dynamic (assigned by a ...read more

OSI layers are a conceptual framework used to understand how different networking protocols interact.

• Layer 1 - Physical layer: Deals with physical connections and transmission of raw data.

• Layer 2 - Data link layer: Manages data transfer between devices on the same network.

• Layer 3 - Network layer: Handles routing and forwarding of data packets between different networks.

• Layer 4 - Transport layer: Ensures reliable data transfer between end systems.

• Layer 5 - Session layer: Manag...read more