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

Topline changes affect the bottom line differently due to fixed and variable costs, impacting profit margins.

• A 10% increase in revenue may lead to less than 10% increase in profit due to fixed costs.

• For example, if a company has high fixed costs, a revenue increase may only boost profits by 5%.

• Conversely, if variable costs are low, profits could increase more than the revenue change.

• Understanding the cost structure is crucial to predict bottom line changes accurately.

I would include my educational background, work experience, skills, certifications, and professional achievements in my biodata.

• Educational background (degrees, institutions)

• Work experience (previous roles, companies)

• Skills (technical, soft skills)

• Certifications (relevant to finance)

• Professional achievements (awards, recognitions)

Timely expense reporting post month-end is crucial for accurate financial management and fund repatriation.

• Expenses should ideally be reported within 5 business days post month-end to ensure timely processing.

• For example, if month-end is on the 31st, expenses should be submitted by the 7th of the following month.

• This allows for accurate financial statements and timely decisions regarding fund repatriation.

• Utilizing automated expense reporting tools can expedite this process s...read more

IRDA is the Insurance Regulatory and Development Authority of India, while RBI is the Reserve Bank of India.

• IRDA is a regulatory body that oversees the insurance sector in India.

• It ensures the protection of policyholders' interests and promotes the growth and development of the insurance industry.

• RBI is the central banking institution of India.

• It is responsible for the regulation and supervision of the country's financial system.

• RBI controls the monetary policy, issues curren...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

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

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

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

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

I appreciated the team's collaborative spirit but found the lack of clear communication challenging at times.

• The team's collaborative spirit fostered a positive work environment, enhancing productivity.

• I enjoyed the innovative projects we undertook, such as the new budgeting software implementation.

• However, I found the lack of clear communication regarding project timelines to be a challenge, leading to some confusion.

• The opportunities for professional development were excell...read more

Aditya Birla Group is a multinational conglomerate with diverse interests in sectors like metals, cement, textiles, and financial services.

• Founded in 1857, the group has a rich history and is headquartered in Mumbai, India.

• It operates in over 36 countries and has a presence in more than 100 markets.

• Key sectors include metals (Aditya Birla Metals), cement (UltraTech Cement), and textiles (Aditya Birla Fashion & Retail).

• The group is also a significant player in financial servic...read more

The software implementation is expected to be completed within 6 months.

• The software implementation timeline will depend on the complexity of the project and the resources available.

• Typically, software implementations can range from a few weeks to several months.

• Factors such as customization requirements, integration with existing systems, and testing can impact the timeline.

• For example, a simple off-the-shelf software may be implemented within a month, while a complex ERP sy...read more

Implementing training and clear guidelines can help employees understand and check MIS effectively.

• Conduct training sessions on how to interpret and analyze MIS reports.

• Create a user-friendly manual or guide that outlines the steps to check MIS.

• Utilize software tools that simplify the process of accessing and reviewing MIS data.

• Assign a dedicated team or individual responsible for overseeing MIS and providing support.

• Encourage a culture of data literacy within the organizatio...read more

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.

Encountered variances in budget vs actual expenses, took actions to analyze and adjust accordingly.

• Identified variances in budgeted expenses compared to actual expenses

• Conducted detailed analysis to understand the root causes of variances

• Implemented cost-saving measures to address negative variances

• Adjusted budget forecasts based on the analysis results

• Communicated findings and actions taken to stakeholders

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

I am open to relocation as it aligns with my commitment to the company's goals and my professional growth.

• Relocation can provide valuable experience in different markets.

• It demonstrates flexibility and adaptability, which are crucial in finance.

• For example, working in a different location may allow me to understand regional financial regulations better.

• I believe that being part of a team in another location can enhance collaboration and knowledge sharing.

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