100+ Finance Manager Interview Questions and Answers

Profit and Loss items description and process overview

• Reviewing revenue and expenses to determine profitability

• Analyzing cost of goods sold and operating expenses

• Preparing financial statements such as income statement and balance sheet

• Budgeting and forecasting for future financial performance

• Identifying areas for cost savings or revenue growth

• Working closely with other departments to gather financial data

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

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

A cash flow statement is a financial statement that shows the inflows and outflows of cash during a specific period.

• It provides information about the sources and uses of cash in a business.

• It helps in assessing the liquidity and financial health of a company.

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

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

• In...read more

The accounting entry on the sale of an asset involves recording the proceeds from the sale and removing the asset from the balance sheet.

• Debit the Cash or Accounts Receivable account for the amount received from the sale

• Credit the Asset account for the original cost of the asset

• Credit the Accumulated Depreciation account for the accumulated depreciation on the asset

• Any gain or loss on the sale should be recorded separately

• Example: If a company sells a vehicle for $10,000 that...read more

AI poses a potential threat to certain jobs but also creates new opportunities for human workers.

• AI can automate repetitive tasks, leading to job displacement in certain industries

• However, AI also creates new job opportunities in fields such as data analysis, AI development, and machine learning

• Human workers can focus on tasks that require creativity, critical thinking, and emotional intelligence, areas where AI currently struggles

• AI can enhance productivity and efficiency in...read more

ICICI sales refers to the sales activities and strategies of ICICI Bank, one of the largest private sector banks in India.

• ICICI Bank offers a wide range of financial products and services to individual and corporate customers.

• The bank utilizes various channels such as branches, online platforms, and mobile apps to drive sales.

• ICICI Bank often runs promotional campaigns and offers discounts to attract new customers and retain existing ones.

• The sales team at ICICI Bank focuses ...read more

Ind AS 115 is a new revenue recognition standard that replaces the existing revenue recognition guidance in Ind AS 18 and Ind AS 11.

• Ind AS 115 establishes a comprehensive framework for recognizing revenue from contracts with customers.

• It requires entities to identify performance obligations in a contract, determine the transaction price, allocate the transaction price to the performance obligations, and recognize revenue when the performance obligations are satisfied.

• The stan...read more

I have successfully implemented cost-saving measures in my previous roles by analyzing expenses, negotiating with vendors, and optimizing processes.

• Conducted thorough analysis of expenses to identify areas for cost reduction

• Negotiated with vendors to secure better pricing and terms

• Implemented process improvements to increase efficiency and reduce waste

• Utilized technology to automate tasks and streamline operations

• Tracked and monitored expenses to ensure savings goals were met

I would forecast revenue by analyzing historical data, market trends, and sales projections.

• Analyze historical revenue data to identify patterns and trends

• Consider market trends and economic indicators that may impact revenue

• Collaborate with sales and marketing teams to gather sales projections

• Use forecasting models such as time series analysis or regression analysis

• Adjust forecasts based on any external factors that may impact revenue

Finance in accounting refers to the management of money and financial resources within an organization.

• Finance in accounting involves analyzing financial data, creating financial reports, and making strategic financial decisions.

• It includes budgeting, forecasting, and managing cash flow to ensure the financial health of the organization.

• Finance managers use financial ratios and metrics to assess the financial performance of the company.

• Examples of finance in accounting includ...read more

I have extensive experience in preparing donor reports, ensuring accuracy and compliance with donor requirements.

• Managed donor reporting process from data collection to submission

• Ensured reports were accurate, timely, and in compliance with donor guidelines

• Communicated effectively with donors to address any queries or concerns

• Utilized financial software and tools to streamline reporting process

The company is looking for a Finance Manager who can effectively manage financial operations and contribute to strategic decision-making.

• Demonstrate strong financial analysis skills

• Show experience in budgeting and forecasting

• Highlight ability to communicate financial information to non-finance stakeholders

• Discuss previous success in improving financial processes or efficiency

Working capital is calculated by subtracting current liabilities from current assets.

• Calculate current assets (cash, accounts receivable, inventory, etc.)

• Calculate current liabilities (accounts payable, short-term debt, etc.)

• Subtract current liabilities from current assets to get working capital

• Formula: Working Capital = Current Assets - Current Liabilities

• Example: Current Assets = $100,000, Current Liabilities = $50,000, Working Capital = $50,000

I implemented various compliances such as GDPR, SOX, and HIPAA.

• Implemented GDPR compliance by ensuring data protection and privacy regulations were met.

• Ensured SOX compliance by implementing internal controls and financial reporting processes.

• Implemented HIPAA compliance by ensuring patient data confidentiality and security measures were in place.

Capital market is a platform where companies and governments can raise funds by selling securities to investors.

• Capital market includes stock market and bond market.

• It provides a way for investors to invest in companies and governments.

• Companies can raise funds by issuing stocks or bonds.

• Governments can issue bonds to finance their projects.

• Investors can buy and sell securities in the capital market.

• The prices of securities are determined by supply and demand.

• Examples of capi...read more

Yes, 5G technology has the potential to revolutionize various industries with its high speed, low latency, and massive connectivity.

• 5G technology enables faster data speeds, lower latency, and increased network capacity.

• It can support the Internet of Things (IoT) devices, autonomous vehicles, smart cities, and virtual reality applications.

• 5G can improve efficiency in industries like healthcare, manufacturing, and transportation.

• It has the potential to enable remote surgeries,...read more

NPV is the present value of expected cash inflows minus the present value of expected cash outflows.

• Identify the expected cash inflows and outflows

• Determine the discount rate

• Calculate the present value of each cash flow

• Subtract the sum of present values of cash outflows from the sum of present values of cash inflows

• The resulting figure is the NPV

Developing software involves several steps such as planning, designing, coding, testing, and deployment.

• Start by understanding the requirements and objectives of the software

• Create a detailed plan outlining the scope, timeline, and resources needed

• Design the software architecture and user interface

• Write the code using a programming language and appropriate frameworks

• Test the software for bugs and errors, and fix them

• Deploy the software to the intended environment and ensure i...read more

One important program for a Finance Manager is financial planning and analysis.

• Financial planning and analysis involves creating budgets, forecasting financial performance, and analyzing financial data.

• It helps in making informed decisions, identifying areas for cost reduction, and maximizing profitability.

• Examples of financial planning and analysis programs include Excel, SAP, Oracle Hyperion, and Adaptive Insights.

Projects are analyzed through financial statements, budgeting, forecasting, and variance analysis.

• Financial statements are analyzed to assess the financial health of the project.

• Budgeting involves creating a financial plan for the project and comparing actual expenses to the budgeted amounts.

• Forecasting helps predict future financial performance based on historical data and market trends.

• Variance analysis involves comparing actual financial results to the budgeted or forecast...read more

Marketing is a broader concept that includes advertising as one of its components.

• Marketing involves identifying customer needs, creating products or services to meet those needs, and promoting them to the target audience.

• Advertising is a specific promotional activity within marketing that focuses on creating and delivering persuasive messages through various channels.

• Marketing encompasses market research, product development, pricing, distribution, and customer relationship ...read more

A synchronous machine is a type of electric machine that operates at a constant speed determined by the frequency of the electrical supply.

• Synchronous machines are commonly used in power generation, industrial applications, and electric vehicles.

• They have a rotor that rotates at the same speed as the rotating magnetic field produced by the stator.

• Synchronous machines are more efficient than induction machines at higher power levels.

• Examples of synchronous machines include syn...read more

A synchronous motor is a type of AC motor in which the rotation of the shaft is synchronized with the frequency of the supply current.

• Uses electromagnets to create a rotating magnetic field

• Requires a separate DC power source to create the magnetic field

• Commonly used in applications where precise speed control is required, such as in industrial machinery

• Examples include synchronous motors used in air compressors, conveyor belts, and electric clocks

Expected CTC depends on the job role, company size, and candidate's experience.

• Expected CTC should be in line with industry standards and the candidate's experience.

• It is important to research the company's salary structure and negotiate based on that.

• Factors like job location, benefits, and bonuses should also be considered.

• For a Finance Manager role, the expected CTC can range from 10-20 lakhs per annum depending on the company and candidate's experience.

The companies operate in various industries such as technology, manufacturing, retail, and finance.

• Technology: Company A specializes in software development and IT services.

• Manufacturing: Company B manufactures automotive parts and components.

• Retail: Company C operates a chain of supermarkets across the country.

• Finance: Company D provides financial advisory and investment banking services.

Fashion Big Bazar is a retail store that offers a wide range of trendy clothing, accessories, and home decor items at affordable prices.

• Fashion Big Bazar follows a business model of offering a diverse selection of fashionable products at competitive prices to attract customers.

• The store focuses on providing a convenient shopping experience by offering a one-stop destination for clothing, accessories, and home decor items.

• Fashion Big Bazar may also incorporate promotional stra...read more

Inventory is valued using the cost method, which involves determining the cost of each item and multiplying it by the number of items in stock.

• Cost method involves determining the cost of each item

• Multiply the cost by the number of items in stock

• Other methods include LIFO, FIFO, and weighted average

• Valuation should be done consistently and accurately

Lease accounting is the process of recording and reporting leased assets and liabilities on a company's financial statements.

• Lease accounting involves recognizing lease assets and liabilities on a company's balance sheet.

• It requires determining the lease term, lease payments, and discount rate to calculate the present value of lease payments.

• There are two types of leases: operating leases and finance leases.

• Operating leases are treated as rental expenses, while finance leases...read more

Synchronous speed is the speed at which the magnetic field rotates in a synchronous motor.

• Synchronous speed is determined by the frequency of the power supply and the number of poles in the motor.

• It is the speed at which the motor's magnetic field rotates in sync with the stator field.

• Formula: Synchronous Speed (rpm) = (120 * Frequency) / Number of Poles

• For example, a 4-pole motor connected to a 60 Hz power supply will have a synchronous speed of 1800 rpm.

I prepare budgets by analyzing historical data, forecasting future expenses, collaborating with department heads, and adjusting as needed.

• Analyze historical financial data to identify trends and patterns

• Forecast future expenses based on company goals and market conditions

• Collaborate with department heads to gather input on budget needs and constraints

• Adjust budget as needed throughout the year based on actual performance and changing circumstances

Recent amendments in GST and CARo

• GST amendments include changes in tax rates, return filing procedures, and input tax credit rules

• CARo amendments focus on enhancing the quality of financial reporting and disclosures by companies

• GST amendments aim to simplify the tax structure and increase compliance

• CARo amendments require companies to disclose more information on related party transactions, internal financial controls, and auditor qualifications

• Examples of GST amendments incl...read more

Budget process is the process of creating, implementing, and monitoring a financial plan for a specific period of time.

• Involves setting financial goals and objectives

• Estimating revenues and expenses

• Allocating resources based on priorities

• Monitoring actual performance against the budget

• Making adjustments as needed

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a measure of a company's operating performance.

• EBITDA is calculated by adding back interest, taxes, depreciation, and amortization to net income.

• It is used to analyze and compare profitability between companies and industries.

• EBITDA helps in assessing a company's ability to generate cash flow from its operations.

• Investors often use EBITDA to evaluate a company's financial health and perfo...read more

Provision entry is an accounting entry made to account for an anticipated expense or liability.

• Provision entry is made to account for expenses or liabilities that are anticipated but not yet incurred.

• It is a way to estimate and record future expenses in the current accounting period.

• Provision entry is usually made at the end of the accounting period.

• Examples of provision entry include provision for bad debts, provision for warranty expenses, and provision for employee benefit...read more

Balance sheet finalization is the process of reviewing and preparing the balance sheet to ensure accuracy and completeness.

• Balance sheet finalization involves reviewing all the accounts and transactions recorded in the general ledger.

• It includes reconciling balances, verifying the accuracy of financial statements, and ensuring compliance with accounting standards.

• The process may involve adjusting entries, such as accruals or deferrals, to properly reflect the financial positi...read more

Psychology at workplace behavior involves understanding how individuals think, feel, and act in a work environment.

• Understanding individual differences in personality, motivation, and communication styles can help improve team dynamics.

• Applying principles of motivation and reinforcement can increase employee engagement and productivity.

• Recognizing and managing stress, conflict, and emotions in the workplace can lead to a more positive work environment.

• Utilizing techniques suc...read more

I expect to utilize my financial expertise to drive strategic decision-making and optimize financial performance.

• Expectation to effectively manage financial operations and budgets

• Desire to implement financial strategies to improve profitability

• Goal to provide accurate financial forecasting and analysis

• Expectation to collaborate with cross-functional teams to achieve financial goals

KYC stands for Know Your Customer. It is a process of verifying the identity of a customer before providing them with services.

• KYC is a regulatory requirement for financial institutions to prevent money laundering and terrorist financing.

• It involves collecting and verifying personal information such as name, address, date of birth, and identification documents.

• KYC can be done through various methods such as in-person verification, video KYC, and e-KYC.

• Examples of KYC document...read more

Understanding technical issues related to GST and audit is crucial for a Finance Manager.

• Knowledge of GST laws and regulations

• Understanding of audit procedures and requirements

• Ability to identify and resolve GST-related issues

• Experience in handling GST audits and compliance

• Familiarity with GST software and tools

Accrued exp refers to expenses that have been incurred but not yet paid for.

• Accrued expenses are recorded as liabilities on the balance sheet.

• They represent expenses that have been recognized but not yet paid.

• Examples include accrued salaries, interest, and taxes.

• Accrued expenses are typically adjusted at the end of an accounting period.

Manappuram Finance is a leading NBFC with a strong track record of growth and profitability in the finance sector.

• Strong track record of growth and profitability

• Wide range of financial products and services

• Robust risk management practices

• Strong customer base and brand reputation

Finding new customers involves identifying target markets, networking, utilizing social media, and offering promotions.

• Identify target markets based on demographics, psychographics, and behavior

• Network with industry professionals, attend conferences, and join networking groups

• Utilize social media platforms to reach a wider audience and engage with potential customers

• Offer promotions, discounts, or incentives to attract new customers

• Collect feedback from existing customers to ...read more

The cost of belief is subjective and can vary depending on the individual's values, beliefs, and experiences.

• The cost of belief can include financial expenses, such as donations to religious organizations or costs associated with practicing a particular faith.

• It can also involve personal sacrifices, such as time spent in prayer or adhering to religious practices.

• The cost of belief may extend to social consequences, such as ostracism or discrimination for holding certain belie...read more

RBI norms applicable for NBFC include capital adequacy requirements, prudential norms, asset classification, income recognition, and provisioning norms.

• Capital adequacy requirements ensure that NBFCs maintain a minimum level of capital to cover risks.

• Prudential norms dictate the limits on exposure to single and group borrowers to manage risk.

• Asset classification norms require classification of assets into standard, sub-standard, doubtful, and loss categories.

• Income recognitio...read more

Preparing AOP involves setting financial targets, analyzing historical data, collaborating with various departments, and creating a detailed budget plan.

• Analyze historical financial data to identify trends and patterns

• Collaborate with department heads to gather input on revenue and expense projections

• Create a detailed budget plan outlining expected revenues, expenses, and profit margins

• Review and adjust the budget plan based on feedback and changes in market conditions

• Present...read more