100+ Finance Manager Interview Questions and Answers

Major adjustments while finalizing accounts include accruals, depreciation, provisions, and adjusting entries.

• Accruals for expenses and revenues

• Depreciation for fixed assets

• Provisions for doubtful debts, warranties, and taxes

• Adjusting entries for errors and omissions

• Reconciliation of accounts

• Closing entries for temporary accounts

Factors considered while analysing a company's performance

• Financial statements (income statement, balance sheet, cash flow statement)

• Profitability ratios (ROE, ROA, gross profit margin)

• Liquidity ratios (current ratio, quick ratio)

• Debt ratios (debt-to-equity ratio, interest coverage ratio)

• Market performance (stock price, market share)

• Industry trends and competition

• Management effectiveness and strategy

• Economic and political factors

Overhead rate for Inventory valuation is calculated by dividing total overhead costs by total direct labor hours. Inventory valuation methods include FIFO, LIFO, and weighted average. CAS 4 deals with depreciation accounting. CAS applicable in current company may vary. Good knowledge in MS Excel is essential. COP is the cost of producing goods, while COGS is the cost of goods sold.

• Calculate overhead rate by dividing total overhead costs by total direct labor hours

• Inventory va...read more

TCS is a multinational IT services and consulting company. Yes, I am familiar with filing GST/TDS returns and ROC filings.

• TCS is short for Tata Consultancy Services, a global IT services and consulting company.

• It provides a wide range of services including software development, business consulting, and IT infrastructure services.

• TCS is headquartered in Mumbai, India and operates in over 46 countries.

• As a Finance Manager, I am familiar with filing GST (Goods and Services Tax) ...read more

To enhance duties and responsibilities, a clear plan must be developed and communicated to all stakeholders.

• Identify areas for improvement

• Develop a plan with specific goals and timelines

• Communicate the plan to all stakeholders

• Provide necessary training and resources

• Monitor progress and adjust as needed

Budget is a plan for future financial activities, while forecast is a prediction of future financial outcomes.

• Budget is a detailed financial plan for a specific period, usually prepared annually.

• Forecast is an estimate of future financial outcomes based on past data and trends.

• Budget is more rigid and set in stone, while forecasts are updated regularly to reflect changing circumstances.

• Budgets are used for planning and control, while forecasts are used for decision-making and...read more

Finance deals with managing money and investments while accounts deal with recording financial transactions.

• Finance involves analyzing financial data, creating financial plans, and making investment decisions.

• Accounts involve recording financial transactions, preparing financial statements, and maintaining financial records.

• Finance is more strategic and forward-looking while accounts are more focused on historical data.

• Examples of finance roles include financial analyst, inve...read more

Reserve and surplus are not assets or liabilities, but rather equity accounts.

• Reserve and surplus are part of the equity section of the balance sheet.

• They represent profits that have been retained by the company instead of being distributed to shareholders.

• Reserves can be created for specific purposes, such as a contingency fund or to finance future projects.

• Surplus is the amount of profits that exceed the company's capital requirements.

• Both reserves and surplus can be used t...read more

Allocate indirect expenses to multiple projects for project-level profitability analysis.

• Allocate indirect expenses based on a predetermined allocation key such as labor hours, square footage, or revenue generated by each project.

• Use cost allocation methods like activity-based costing or cost driver analysis to distribute indirect expenses accurately.

• Track and record indirect expenses separately for each project to ensure accurate project-level profitability analysis.

• Regularl...read more

The prime sources of finance manager are equity, debt, and retained earnings.

• Equity financing through stocks and shares

• Debt financing through loans and bonds

• Retained earnings from profits

• Leasing and factoring

• Grants and subsidies

• Crowdfunding and peer-to-peer lending

I would provide a high-level overview of expenses without going into specific details.

• Focus on broad categories of expenses such as salaries, marketing, operations, etc.

• Avoid providing specific amounts or breakdowns that could be used to syphon off funds.

• Emphasize the importance of confidentiality and data security when discussing financial information.

To ensure correct financial statement reporting and closing entries, I will implement strong internal controls, perform regular reconciliations, and involve multiple team members in the review process.

• Implement strong internal controls to prevent errors and fraud

• Perform regular reconciliations of accounts to ensure accuracy

• Involve multiple team members in the review process to catch any discrepancies

• Document all financial transactions and ensure proper classification

• Stay upda...read more

Energy level should be positive, enthusiastic and confident.

• Maintain eye contact and smile

• Speak clearly and confidently

• Show enthusiasm for the role and company

• Avoid being too nervous or too relaxed

• Be positive and avoid negative comments

• Show interest in the interviewer and their questions

Elements in MIS include data, information, systems, and processes. Variances can be caused by errors, changes in assumptions, or external factors.

• Elements in MIS: data, information, systems, processes

• Reasons for variance: errors, changes in assumptions, external factors

• Example: Variance in budgeted vs. actual expenses due to unexpected increase in costs

LHR stands for Liquidity-Asset Ratio, it is calculated to determine a company's ability to meet short-term obligations.

• LHR is calculated by dividing liquid assets by current liabilities.

• It helps assess a company's liquidity and ability to pay off short-term debts.

• A higher LHR indicates better liquidity and financial health.

• For example, if a company has liquid assets of $100,000 and current liabilities of $50,000, the LHR would be 2.

I have extensive experience in sales and margin variance analysis.

• I have worked as a finance manager for 5 years, where I was responsible for analyzing sales and margin variances on a monthly basis.

• I have experience in identifying trends and patterns in sales data, and using this information to make recommendations for improving profitability.

• I have also worked closely with sales teams to develop pricing strategies that maximize margins while remaining competitive in the mark...read more

Controlling debtors outstanding involves setting credit policies, monitoring payment schedules, and following up on overdue accounts.

• Establish clear credit policies and payment terms

• Monitor payment schedules and follow up on overdue accounts

• Offer incentives for early payments and penalties for late payments

• Maintain good relationships with customers to encourage timely payments

• Consider outsourcing debt collection to a third-party agency if necessary

7/12 is a fraction used in land measurement in India. The first thing seen in 7/12 is the name of the landowner.

• 7/12 is a fraction used in land measurement in India

• It represents the portion of land owned by a particular person

• The first thing seen in 7/12 is the name of the landowner

• It also includes details like survey number, area, and type of land

To handle and coordinate staff, a finance manager should establish clear communication channels, set expectations, provide guidance and support, delegate tasks, and foster a positive work environment.

• Establish clear communication channels to ensure effective information flow

• Set expectations and goals for the team to align their efforts

• Provide guidance and support to help staff members perform their best

• Delegate tasks based on individual strengths and development needs

• Foster a...read more

I have over 5 years of experience in forecasting and budgeting, including creating financial models and analyzing variances.

• Developing detailed financial forecasts based on historical data and market trends

• Creating annual budgets and monitoring performance against targets

• Analyzing variances and identifying areas for cost savings or revenue growth

• Utilizing financial modeling techniques to support decision-making

• Collaborating with cross-functional teams to align financial goals...read more

Budgeting and financial management are crucial for NGOs to ensure efficient use of resources and transparency in operations.

• NGOs rely on funding from donors, grants, and fundraising events to support their programs and initiatives.

• Budgeting involves creating a financial plan that outlines expected income and expenses for a specific period.

• Financial management includes monitoring cash flow, tracking expenses, and ensuring compliance with financial regulations.

• NGOs should prior...read more

NGOs must comply with FCRA regulations under the amended law to receive foreign funding.

• NGOs must register under the Foreign Contribution (Regulation) Act (FCRA) to receive foreign funding.

• They need to maintain proper records of all foreign contributions received and their utilization.

• NGOs must submit annual returns and reports to the Ministry of Home Affairs.

• Any violation of FCRA regulations can result in penalties or cancellation of registration.

• The amended law has stricter...read more

GRIR stands for Goods Receipt Invoice Receipt. It is generated when there is a discrepancy between goods received and invoice received.

• GRIR is a sub-ledger account that tracks the difference between goods received and invoice received.

• It is generated when there is a discrepancy between the quantity or price of goods received and the invoice received.

• GRIR helps in identifying and resolving discrepancies in a timely manner.

• It is important for accurate financial reporting and in...read more

I will help grow funds by analyzing financial data, identifying opportunities for investment, and implementing strategic financial plans.

• Conducting thorough financial analysis to identify areas for growth

• Developing and implementing strategic financial plans to maximize returns

• Identifying and pursuing investment opportunities to increase funds

• Monitoring and adjusting financial strategies to adapt to market changes

Buyer credit is credit extended to the buyer by a financial institution, while supplier credit is credit extended to the buyer by the supplier.

• Buyer credit involves a financial institution providing credit to the buyer to make a purchase, while supplier credit involves the supplier offering credit terms to the buyer.

• Buyer credit typically involves lower interest rates compared to supplier credit.

• Buyer credit may involve a third party financial institution, while supplier cred...read more

Reconciling GL and subledger involves identifying and resolving discrepancies between the two accounts.

• Compare transactions in GL and subledger to identify discrepancies

• Investigate any differences in balances or transactions

• Adjust entries in GL or subledger to reconcile the accounts

• Ensure proper documentation of reconciliation process

• Communicate with relevant stakeholders to resolve discrepancies

Yes, I have completed a course on financial modeling and analysis.

• I completed a course on financial modeling and analysis from XYZ Institute.

• The course helped me develop skills in Excel, financial statement analysis, and valuation techniques.

• I also attended a workshop on effective communication and leadership skills.

• This helped me improve my communication skills and become a better team leader.

• I believe that continuous learning is important for professional growth and develop...read more

MIS is a system that provides managers with information to make decisions and manage operations effectively.

• MIS collects, processes, and presents data to help managers make informed decisions.

• It includes reports, dashboards, and tools for analysis.

• MIS helps in monitoring performance, tracking progress, and identifying trends.

• Examples of MIS include financial reports, sales forecasts, inventory management systems.

I have over 5 years of experience in financial reporting, including preparing financial statements, analyzing financial data, and presenting findings to stakeholders.

• Prepared monthly, quarterly, and annual financial statements in compliance with GAAP

• Analyzed financial data to identify trends and variances

• Presented financial findings to senior management and stakeholders

• Implemented process improvements to streamline financial reporting procedures

I have worked with QuickBooks, SAP, and Oracle accounting software.

• Experience with QuickBooks for small business accounting

• Proficiency in SAP for financial reporting and analysis

• Knowledge of Oracle for large-scale enterprise accounting

• Familiarity with other accounting software such as Xero and FreshBooks

The software used by Finance Managers varies depending on the company and industry.

• Common software used by Finance Managers include accounting software like QuickBooks, Xero, and SAP.

• Financial planning and analysis software like Adaptive Insights and Anaplan are also commonly used.

• Enterprise resource planning (ERP) systems like Oracle and Microsoft Dynamics may be utilized for financial management.

• Data visualization tools like Tableau and Power BI can help in analyzing financ...read more

Yes, I have prepared Consolidated Financial Statements for multiple entities to provide a comprehensive view of the overall financial health.

• Prepared Consolidated Financial Statements for multiple entities to show a combined financial position

• Ensured accurate consolidation of financial data from subsidiaries

• Analyzed and interpreted the consolidated financial results to provide insights to stakeholders

• Complied with relevant accounting standards and regulations in preparing the...read more

Rent is short-term, lease is long-term. Rent expense is recorded monthly, lease expense is amortized over lease term.

• Rent is typically for a short period of time, while lease is for a longer period.

• Rent expense is recorded monthly in the income statement, while lease expense is amortized over the lease term in the balance sheet.

• Lease agreements often involve a fixed term and specific terms and conditions, while rent agreements are more flexible and can be renewed on a monthly...read more

Post variance analysis is treated by identifying root causes, developing action plans, and monitoring progress.

• Identify the root causes of the variances to understand why they occurred

• Develop action plans to address the identified issues and improve future performance

• Monitor progress regularly to ensure that the action plans are being implemented effectively

• Communicate findings and recommendations to relevant stakeholders for transparency and accountability

Bank reconciliation involves comparing the bank statement with the company's records to ensure they match.

• Gather bank statements and company records

• Compare deposits and withdrawals on both statements

• Identify and investigate any discrepancies

• Adjust the company's records to match the bank statement

• Prepare a reconciliation report

Areas covered include financial planning, budgeting, forecasting, financial analysis, and reporting.

• Financial planning

• Budgeting

• Forecasting

• Financial analysis

• Reporting

Finance is the management of money and investments.

• Finance involves managing money, investments, and other financial assets.

• It includes activities such as budgeting, saving, investing, and borrowing.

• Finance helps individuals and organizations make informed financial decisions.

• Examples of finance include budgeting for personal expenses, investing in stocks, and managing company finances.

Internal Rate of Return (IRR) is the rate at which the net present value of cash flows from an investment equals zero.

• IRR is used to evaluate the profitability of potential investments.

• It takes into account the time value of money and considers all cash flows over the life of the investment.

• IRR is calculated by finding the discount rate that makes the net present value of cash flows equal to zero.

• If the IRR is greater than the required rate of return, the investment is consid...read more

Accounting standards, MIS reporting in multi-currency, and TDS are important aspects of finance management.

• Accounting standards ensure accurate financial reporting and compliance with regulations.

• MIS reporting in multi-currency involves converting financial data from different currencies to a common currency for analysis.

• TDS is a tax deducted at source and is an important aspect of tax compliance.

• Proper implementation of accounting standards and MIS reporting can help in bett...read more

The bill booking process involves recording and tracking invoices and payments.

• Invoices are received from vendors and entered into the accounting system

• The invoices are reviewed for accuracy and approved for payment

• Payments are scheduled and made according to payment terms

• Records are kept of all invoices and payments for future reference

• The process may involve communication with vendors to resolve any issues or discrepancies

Key financial metrics are measurements used to evaluate a company's financial performance.

• Revenue growth rate

• Profit margin

• Return on investment

• Debt-to-equity ratio

• Current ratio

• Cash flow

• Earnings per share

• Price-to-earnings ratio

Income tax provisions for trusts include tax rates, deductions, exemptions, and compliance requirements.

• Trusts are taxed at different rates compared to individuals or corporations.

• Trusts can claim deductions for expenses incurred in generating income.

• Certain types of trusts may be eligible for tax exemptions.

• Trusts must file annual tax returns and comply with reporting requirements.

• Income distributed to beneficiaries may be taxed at their individual rates.

MHR stands for Maximum Heart Rate. It is the highest heart rate an individual can achieve during exercise.

• MHR can be calculated using the formula: 220 - age

• For example, for a 30-year-old individual, the MHR would be 220 - 30 = 190 beats per minute

• MHR is used to determine target heart rate zones for exercise intensity

I am aware of recent case laws related to tax evasion and corporate fraud.

• Recent case law involving a major corporation accused of tax evasion

• Recent case law involving individuals charged with corporate fraud

• Updates on legal precedents related to financial crimes

Expense refers to the cost incurred in the normal course of business operations, while expenditure refers to the act of spending money.

• Expense is the cost incurred in the normal course of business operations, such as salaries, rent, utilities, etc.

• Expenditure refers to the act of spending money, which can include both expenses and investments.

• Expenses are recorded on the income statement, while expenditures are recorded on the cash flow statement.

• Expenses are typically recurr...read more

Finance is the management of money and investments.

• Finance involves managing money and investments to achieve financial goals.

• It includes activities such as budgeting, investing, and financial analysis.

• Finance is important for individuals, businesses, and governments to make informed financial decisions.

• Examples of finance include managing personal savings, investing in stocks, and analyzing financial statements.

• Finance also involves understanding financial markets and econom...read more

Yes, I have experience in handling Ind AS financials.

• I have worked with Ind AS financials in my previous roles.

• I am familiar with the accounting standards and reporting requirements.

• I have undergone training on Ind AS and keep myself updated with any changes.

• I am confident in my ability to handle Ind AS financials for this role.