WNS Senior Finance Associate Interview Questions, Process, and Tips

Minority interest refers to the portion of a subsidiary's net income or losses that is not owned by the parent company.

• It is the ownership stake in a company that is less than 50%

• It is reported on the balance sheet as a liability

• It is calculated by multiplying the subsidiary's net income or loss by the percentage of ownership held by the minority shareholder

• It is also known as non-controlling interest (NCI)

• Example: If ...read more

Impairment is a sudden decrease in the value of an asset, while depreciation is a gradual decrease in the value of an asset over time.

• Impairment is usually caused by external factors such as economic downturns or changes in market conditions.

• Depreciation is a result of wear and tear, obsolescence, or the passage of time.

• Impairment is recognized as a loss on the income statement, while depreciation is recognized as an e...read more

Linking between Income Statement, Balance sheet and cash flow statement

• The net income from the income statement is added to the retained earnings in the balance sheet

• Changes in assets and liabilities in the balance sheet affect the cash flow statement

• Net cash flow from operating activities in the cash flow statement is derived from the income statement and balance sheet

• Net cash flow from investing and financing activit...read more

Share repurchase is a process of buying back company's own shares from the market.

• Share repurchase is also known as stock buyback.

• It is a way for companies to return value to shareholders.

• It can be done through open market purchases or tender offers.

• Share repurchase reduces the number of outstanding shares, increasing earnings per share.

• It can also be used to prevent hostile takeovers.

• Example: Apple repurchased $75 bil...read more

PE ratio is a financial metric used to evaluate the relative value of a company's stock.

• PE ratio is calculated by dividing the market price per share by the earnings per share (EPS)

• It helps investors determine if a stock is overvalued or undervalued

• A high PE ratio may indicate that a stock is overvalued, while a low PE ratio may indicate that a stock is undervalued

• PE ratio can vary by industry and should be compared to...read more

Cash Conversion Cycle is the time taken to convert inventory into cash.

• It measures the efficiency of a company's cash flow.

• It includes the time taken to sell inventory, collect receivables, and pay suppliers.

• A shorter cycle indicates better cash flow management.

• Formula: CCC = DIO + DSO - DPO

• DIO = Days Inventory Outstanding, DSO = Days Sales Outstanding, DPO = Days Payable Outstanding

Deferred Tax Liability is a balance sheet item that represents the amount of income tax that a company will owe in the future.

• It arises due to temporary differences between the book and tax values of assets and liabilities

• It is calculated using the tax rate that is expected to apply in the period when the liability is settled

• It is a non-current liability and is reported on the balance sheet

• Examples include depreciation...read more

Normalised profit is the adjusted profit of a company, excluding one-time or non-recurring items.

• Normalised profit is used to provide a more accurate picture of a company's ongoing profitability.

• It excludes one-time gains or losses, such as the sale of assets or restructuring costs.

• Normalised profit is calculated by adjusting the reported profit for these one-time items.

• It is useful for comparing the profitability of a...read more

Restricted cash is cash that is set aside for a specific purpose and cannot be used for other expenses.

• Restricted cash is typically held in a separate account or in a separate section of the general ledger.

• It is often used to ensure that funds are available for a specific purpose, such as a legal settlement or a capital expenditure.

• Examples of restricted cash include security deposits, escrow accounts, and funds held i...read more