Financial Analyst 1

10+ Financial Analyst 1 Interview Questions and Answers

Updated 18 Aug 2024
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Q1. Balance sheets and what are the major components of it.. And when it will be used.

Ans.

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

Q2. Profit and loss account and what are the uses.

Ans.

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

Financial Analyst 1 Interview Questions and Answers for Freshers

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Q3. Accounting principles and it's major components

Ans.

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

Q4. What is difference between equity and a bond

Ans.

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

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Q5. Explain income statement, balance sheet, element of CFS

Ans.

Income statement shows company's financial performance, balance sheet shows assets and liabilities, CFS elements include operating, investing, and financing activities.

  • Income statement: shows company's revenues, expenses, and profits over a period of time (e.g. quarterly or annually)

  • Balance sheet: provides a snapshot of company's assets, liabilities, and shareholders' equity at a specific point in time

  • Cash Flow Statement (CFS) elements: operating activities (e.g. cash from sa...read more

Q6. RBI role and it's current governer name

Ans.

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

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Q7. What are golden rules of accounting

Ans.

The golden rules of accounting are fundamental principles that guide the recording of financial transactions.

  • The first golden rule is the Debit and Credit rule, which states that for every debit entry, there must be a corresponding credit entry.

  • The second golden rule is the Real Account rule, which states that assets have a debit balance, while liabilities and equity have a credit balance.

  • The third golden rule is the Nominal Account rule, which states that expenses and losses...read more

Q8. What do mean by derivatives

Ans.

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.

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Q9. Tellus about research paper

Ans.

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

Q10. What is cash flow statement

Ans.

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

Q11. Cashflow and it's types

Ans.

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

Q12. Golden Rules of accounting

Ans.

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

Frequently asked in, ,

Q13. What is debenture

Ans.

A debenture is a type of debt instrument that is not secured by physical assets or collateral.

  • Debentures are issued by corporations and governments to raise capital.

  • They are backed only by the creditworthiness and reputation of the issuer.

  • Debenture holders are considered creditors and are paid interest on their investment.

  • They are typically long-term investments with maturities ranging from 10 to 30 years.

  • Examples of debentures include corporate bonds and government bonds.

Q14. What is money market

Ans.

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

Q15. Fund accounting in breef

Ans.

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

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