10+ Financial Analyst 1 Interview Questions and Answers

Balance sheets are financial statements that show a company's assets, liabilities, and shareholders' equity at a specific point in time.

• Major components of a balance sheet include assets, liabilities, and shareholders' equity.

• Assets represent what the company owns, such as cash, inventory, and property.

• Liabilities are the company's debts and obligations, such as loans and accounts payable.

• Shareholders' equity represents the owners' stake in the company.

• Balance sheets are used...read more

Profit and loss account is a financial statement that shows a company's revenues, expenses, and net income or loss for a specific period.

• It provides a summary of a company's financial performance over a given period.

• It helps in assessing the profitability and financial health of a business.

• Investors and stakeholders use it to evaluate the company's ability to generate profits.

• It assists in making informed decisions regarding investments, loans, and business strategies.

• It help...read more

Accounting principles are the guidelines and rules that govern the preparation and presentation of financial statements.

• Accrual principle: Revenue and expenses are recognized when earned or incurred, regardless of when cash is received or paid.

• Consistency principle: Accounting methods and practices should be consistent over time to ensure comparability.

• Materiality principle: Only significant information that would influence the decisions of users should be included in financi...read more

Equity represents ownership in a company, while a bond is a debt instrument issued by a company or government.

• Equity represents ownership in a company, giving shareholders the right to vote and receive dividends.

• Bonds are debt instruments where investors lend money to a company or government in exchange for periodic interest payments and the return of principal at maturity.

• Equity holders have a higher risk and potential for higher returns compared to bondholders.

• Bonds have a ...read more

The Reserve Bank of India (RBI) is the central banking institution of India. The current governor is Shaktikanta Das.

• The RBI is responsible for the issue and supply of the Indian rupee and the regulation of the Indian financial system.

• It formulates and implements monetary policy, controls the banking system, and manages foreign exchange reserves.

• The current governor, Shaktikanta Das, assumed office on December 12, 2018.

• Under his leadership, the RBI has implemented various mea...read more

Derivatives are financial instruments whose value is derived from an underlying asset or group of assets.

• Derivatives can be used for hedging risk, speculating on price movements, or gaining exposure to assets without owning them.

• Common types of derivatives include options, futures, forwards, and swaps.

• Derivatives can be traded on exchanges or over-the-counter (OTC).

• They are often used by investors, companies, and financial institutions to manage risk or enhance returns.

I have written a research paper on the impact of interest rates on stock market performance.

• Researched and analyzed the relationship between interest rates and stock market performance

• Collected and analyzed historical data on interest rates and stock market indices

• Conducted statistical analysis to identify correlations and trends

• Examined the impact of interest rate changes on different sectors of the stock market

• Provided recommendations for investors based on the findings

• Pres...read more

The cash flow statement is a financial statement that shows the inflows and outflows of cash in a company over a specific period.

• It provides information about the cash generated from operating activities, investing activities, and financing activities.

• Operating activities include cash received from sales, payment to suppliers, and payment to employees.

• Investing activities include cash used for purchasing or selling assets, such as property, plant, and equipment.

• Financing acti...read more

Cashflow refers to the movement of cash in and out of a business. There are three types of cashflow: operating, investing, and financing.

• Operating cashflow is the cash generated from a company's core business activities, such as sales revenue and accounts receivable.

• Investing cashflow is the cash used for investing in assets such as property, plant, and equipment.

• Financing cashflow is the cash used for financing activities such as issuing stock or paying dividends.

• Positive ca...read more

Golden Rules of accounting are basic principles to maintain financial records accurately.

• Debit the receiver, credit the giver

• Debit what comes in, credit what goes out

• Debit all expenses and losses, credit all incomes and gains

Money market refers to a market where short-term financial instruments are traded.

• Money market deals with short-term borrowing, lending, buying, and selling of financial instruments.

• It includes instruments like treasury bills, commercial papers, certificates of deposit, etc.

• Money market is considered less risky than other markets as the instruments have a short maturity period.

• It is used by governments, corporations, and financial institutions to manage their short-term cash ...read more

Fund accounting is a specialized accounting system used by non-profit organizations and government agencies to track and manage funds.

• It involves tracking and reporting on the use of funds for specific purposes

• It ensures compliance with legal and regulatory requirements

• It allows for transparency and accountability in financial reporting

• Examples include tracking donations for a charity or grants for a government agency