All

Also what ratios (liquidity, leverage, etc.) you’ll look into as relationship person and what as credit person while on boarding a new corporate.

As a relationship person, when onboarding a new corporate client, the key ratios I would look into would primarily be liquidity and profitability ratios. Liquidity ratios such as the current ratio and quick ratio would help assess the company’s ability to meet its short-term obligations. These ratios indicate the availability of liquid assets to cover …

Also what ratios (liquidity, leverage, etc.) you’ll look into as relationship person and what as credit person while on boarding a new corporate. Read More »

And also what’s your understanding of the difference between credit and relationship manager.

In the banking industry, the roles of a credit manager and a relationship manager are distinct but interconnected. While both roles involve client engagement and managing client relationships, they focus on different aspects of the banking process. A credit manager primarily deals with the analysis and evaluation of creditworthiness and risk associated with lending activities. …

And also what’s your understanding of the difference between credit and relationship manager. Read More »

Difference between capital expenditure and revenue expenditure along with examples and with case study

Capital expenditure refers to the expenses incurred by a company for acquiring, improving, or extending its fixed assets, which are expected to provide benefits over multiple accounting periods. These expenditures are capitalized on the balance sheet and are typically large in nature. Examples of capital expenditures include the purchase of property, plant, and equipment (PP&E), …

Difference between capital expenditure and revenue expenditure along with examples and with case study Read More »

In case of export of goods how would u recognise revenue

In the case of export of goods, the recognition of revenue follows certain principles and guidelines outlined in accounting standards. Revenue from export sales is typically recognized when the following criteria are met: 1. Identification of the contract: The existence of a legally enforceable contract between the exporter and the customer is essential. The contract …

In case of export of goods how would u recognise revenue Read More »

Why do you want to join statutory audit and why PWC?

I am drawn to statutory audit because it provides an opportunity to gain a comprehensive understanding of organizations’ financial operations, assess their compliance with regulatory requirements, and provide valuable insights for stakeholders. By conducting statutory audits, I can contribute to ensuring the accuracy and reliability of financial information, promoting transparency, and enhancing the overall trust …

Why do you want to join statutory audit and why PWC? Read More »

Why do you think audit should be conducted? If there was no statutory requirement under companies act, would you still do an audit?

Audit is conducted to provide assurance and enhance the credibility of financial information presented by an organization. It serves several important purposes: 1. Compliance: Audit ensures that the financial statements and records of an organization comply with applicable laws, regulations, and accounting standards. It helps in verifying the accuracy and completeness of financial information, thereby …

Why do you think audit should be conducted? If there was no statutory requirement under companies act, would you still do an audit? Read More »

Why Mumbai and not Pune?

If asked why I chose Mumbai over Pune, I would explain that the decision was based on several factors: 1. Professional Opportunities: Mumbai is considered the financial capital of India, with a thriving business environment and numerous opportunities in various industries. The city is home to numerous multinational companies, financial institutions, and professional service firms, …

Why Mumbai and not Pune? Read More »

Planning and Execution in audit

Planning and execution are essential components of the audit process. Here’s an overview of how they are approached: 1. Planning: Audit planning involves understanding the client’s business, identifying risks, and developing an audit strategy. This includes: – Client Assessment: Assessing the client’s industry, business operations, and internal control systems to understand the key risks and …

Planning and Execution in audit Read More »

Why stat audit? Why big 4 even after hectic hours?

Statutory audit offers several benefits that make it an attractive choice for professionals, especially in the context of Big 4 firms: 1. Professional Growth: Statutory audit provides an opportunity to work with diverse clients across various industries, which enhances professional growth and expertise. It allows auditors to gain a deep understanding of different business models, …

Why stat audit? Why big 4 even after hectic hours? Read More »

How to manage a team and client

Managing a team and client effectively requires a combination of strong leadership skills, effective communication, and a customer-centric approach. Here are some key strategies for managing both aspects: 1. Clear Communication: Maintain open and transparent communication channels with both your team members and clients. Clearly articulate expectations, project goals, and deadlines to ensure everyone is …

How to manage a team and client Read More »

What do you know about FP&A?

FP&A stands for Financial Planning and Analysis. It is a crucial function within an organization that focuses on financial forecasting, budgeting, and analysis to support strategic decision-making. FP&A professionals work closely with senior management and other departments to develop financial plans, evaluate performance, and provide insights into the financial health of the company. In FP&A, …

What do you know about FP&A? Read More »

How you used to resolve conflicts among team members?

In resolving conflicts among team members, I believe in adopting a proactive and collaborative approach. Firstly, I promote open and transparent communication, encouraging all team members to express their viewpoints and concerns respectfully. This helps create an environment where everyone feels heard and valued. When conflicts arise, I actively listen to all parties involved, seeking …

How you used to resolve conflicts among team members? Read More »

Your Weaknesses

Here are some weaknesses you can mention during an interview: 1. **Attention to Detail:** Example: “I’ve found that I can sometimes get caught up in the minutiae of a task, which has occasionally caused delays. For instance, during an audit, I spent more time than necessary on data validation, which affected our overall timeline. To …

Your Weaknesses Read More »

Your strengths

Here are a few sample strengths you can mention, along with examples to back them up: 1. **Attention to Detail:** Example: “In my role as a junior audit assistant, I consistently demonstrated strong attention to detail by meticulously reviewing financial records and identifying discrepancies. On one occasion, I noticed a small error in the reconciliation …

Your strengths Read More »

Apart from your academics achievements, what are your other achievements?

In addition to my academic achievements, I have also achieved success in various other areas of my life. One notable achievement is my active involvement in extracurricular activities and leadership roles during my college years. I have served as the president of a student organization, where I successfully organized and executed various events, fostering a …

Apart from your academics achievements, what are your other achievements? Read More »

Tell us about your Article ship challenges.

During my articleship, I encountered various challenges that allowed me to grow both personally and professionally. One of the key challenges I faced was managing tight deadlines and multiple client engagements simultaneously. As an article trainee, I had to balance my time effectively to ensure timely completion of audit assignments and other responsibilities. Another challenge …

Tell us about your Article ship challenges. Read More »

Tell us about your articleship focus.

During my articleship, my focus was primarily on gaining practical experience and exposure in the field of auditing and financial accounting. I worked under the guidance of experienced professionals in a reputed firm, which provided me with valuable opportunities to enhance my skills and knowledge. One of my main areas of focus during my articleship …

Tell us about your articleship focus. Read More »

Common Observations or audit points in Procure to Pay Process

During the audit of the Procurement-to-Pay (P2P) process, there are several common issues or observations that auditors often encounter. These issues can lead to inaccuracies, inefficiencies, compliance breaches, and financial losses. Here are some common audit issues or observations in the Procurement-to-Pay process: 1. Lack of Segregation of Duties (SoD): One of the primary concerns …

Common Observations or audit points in Procure to Pay Process Read More »

Tell us about your observations in audit.

Here are some examples you can use 1. Misclassification of Air Conditioners/other appliances as Office Equipment ACs, whether installed in Factory or in Office should be treated as Plant and Machinery with 15 Years useful life. But they are often misclassified as Office Equipment with 5 years useful life under Schedule II of Companies Act. …

Tell us about your observations in audit. Read More »

Why not hire a B com with 10 year experience instead of you? I will have to pay same or lesser salary

While hiring a B.Com candidate with 10 years of experience may bring a certain level of expertise, I believe that my unique combination of qualifications, skills, and potential make me a valuable candidate for this position. Firstly, as a Chartered Accountant (CA), I have undergone rigorous training and education that goes beyond the scope of …

Why not hire a B com with 10 year experience instead of you? I will have to pay same or lesser salary Read More »

You will leave us for your parents business, what will you add to us?

I understand your concern about my potential departure for my parents’ business. While it is true that I have a family business background, I am genuinely interested in pursuing a career with your organization and contributing to its growth and success. If given the opportunity, I would bring a unique combination of skills and experiences …

You will leave us for your parents business, what will you add to us? Read More »

What are your achievement in articleship and tell us the number of audits you have done in the companies?

During my articleship, I had the opportunity to work on various assignments and gain valuable experience. I actively participated in audits of different companies, which included both statutory and internal audits. Over the course of my articleship, I successfully contributed to the completion of X audits, ranging from small-scale enterprises to large corporations. In terms …

What are your achievement in articleship and tell us the number of audits you have done in the companies? Read More »

Suppose you are the forex officer, and there is the war going on between Russia and Ukraine, so what will be you do in case of foreign exchange work between Russia and Ukraine?

As a forex officer, in the event of a war between Russia and Ukraine, my primary responsibility would be to closely monitor the situation and assess the potential impact on foreign exchange operations between the two countries. I would take the following steps: 1. Risk Assessment: I would conduct a thorough risk assessment to evaluate …

Suppose you are the forex officer, and there is the war going on between Russia and Ukraine, so what will be you do in case of foreign exchange work between Russia and Ukraine? Read More »

What have you seen in our annual report?

1. Financial Performance: This involves assessing the company’s financial statements, including the balance sheet, income statement, and cash flow statement, to understand the company’s profitability, liquidity, and financial health. 2. Business Operations: The annual report provides insights into the company’s core business operations, including its products or services, market presence, and competitive position. It may …

What have you seen in our annual report? Read More »

Suppose you are the CFO of the company for one day, what changes will you make being the CFO?

If I were the CFO of the company for one day, I would focus on implementing changes that enhance financial performance, strengthen internal controls, and drive strategic decision-making. Here are some areas where I would prioritize my efforts: 1. Financial Planning and Analysis: I would review and improve the budgeting and forecasting process to ensure …

Suppose you are the CFO of the company for one day, what changes will you make being the CFO? Read More »

Are you willing to relocate nearby to the office? (The candidate was staying 30kms away)

Yes, I am willing to relocate nearby to the office. While I currently reside 30 kilometers away, I understand the importance of being close to the workplace for efficient and timely performance of duties. Relocating nearby would offer several advantages, such as reduced commuting time and improved availability to respond to work-related requirements. It would …

Are you willing to relocate nearby to the office? (The candidate was staying 30kms away) Read More »

What do you know about this role? Note: You need to customise the answer

Based on my knowledge, this role typically involves working in the field of finance, where the primary responsibilities revolve around financial analysis, reporting, and decision-making. The role may require conducting financial research, analyzing financial data, preparing financial statements, and providing insights and recommendations to support business strategies. The specific duties may vary depending on the …

What do you know about this role? Note: You need to customise the answer Read More »

Why this domain? Exploring new roles or actually interested?

I am genuinely interested in this domain for several reasons. Firstly, I have always had a strong passion for finance and the intricacies of the business world. I find the dynamic nature of the financial industry fascinating, and I am motivated to stay updated on the latest trends and developments. Secondly, I believe that this …

Why this domain? Exploring new roles or actually interested? Read More »

Why tresvista and not big 4 (Similar Qs might be asked at other places giving similar pay as Big 4s)

While the Big 4 firms are well-established and renowned in the industry, I believe that TresVista offers unique opportunities and advantages that align with my career aspirations and professional growth. Firstly, TresVista provides a more focused and specialized work environment. Being a boutique financial services firm, TresVista offers the opportunity to work closely with clients …

Why tresvista and not big 4 (Similar Qs might be asked at other places giving similar pay as Big 4s) Read More »

Clients handled in articleship (full end to end process)’

During my articleship, I had the opportunity to work with a diverse range of clients across various industries. I was involved in the full end-to-end process of handling these clients, which provided me with valuable insights and practical experience. One of the clients I worked with was a manufacturing company that specialized in consumer goods. …

Clients handled in articleship (full end to end process)’ Read More »

If you are working in a team and your team mate have to leave urgently due to some urgent work and his work is still pending and you are working on a project which have deadline on the same day. How will you handle the situation?

In a situation where my team mate has to leave urgently due to some personal work, leaving their pending tasks behind while we are working on a project with a deadline on the same day, I would approach the situation by following these steps: 1. Assess the urgency: Firstly, I would evaluate the urgency of …

If you are working in a team and your team mate have to leave urgently due to some urgent work and his work is still pending and you are working on a project which have deadline on the same day. How will you handle the situation? Read More »

If you have assigned work to two of your trainees and one of them feels that work given to him is more as compared to other and he complains about the same. how do you tackle this situation?

In a situation where one trainee feels that the work assigned to them is more compared to another trainee and raises a complaint, it is important to address the concern with fairness, empathy, and effective communication. Firstly, I would listen attentively to the trainee’s complaint and allow them to express their concerns openly. I would …

If you have assigned work to two of your trainees and one of them feels that work given to him is more as compared to other and he complains about the same. how do you tackle this situation? Read More »

Suppose you have received urgent work from the manager in the morning and suddenly a family plan happened, you have to leave office urgently. So, what will be your response in that scenario?

If faced with such a situation, my immediate response would be to communicate openly and honestly with both my manager and the rest of the team. I would inform my manager about the urgent family plan and explain the need for me to leave the office unexpectedly. I would apologize for any inconvenience caused and …

Suppose you have received urgent work from the manager in the morning and suddenly a family plan happened, you have to leave office urgently. So, what will be your response in that scenario? Read More »

What about your further study? e.g. if you are Semi Qualified or if you are a Qualified CA

As a professional, I believe in the importance of continuous learning and development. If I am in the process of pursuing the CA qualification and I am a semi-qualified CA, my next step would be to complete the CA Final examination. I am committed to dedicating the necessary time and effort to successfully clear the …

What about your further study? e.g. if you are Semi Qualified or if you are a Qualified CA Read More »

Do you have any friend in our organization? What have you heard?

While I do not have any personal connections or friends in your organization, I have taken the initiative to research and learn more about your company before applying for this position. Through my research, I have come across positive feedback and reviews about your organization’s reputation in the industry. I have heard that your company …

Do you have any friend in our organization? What have you heard? Read More »

What is your expectation from our company or what are you looking for? Why you want to start job and not keep studying?

My expectations from your company align with my career goals and aspirations. Firstly, I am looking for a challenging and fulfilling work environment where I can apply my skills and knowledge to contribute to the success of the organization. I value opportunities for growth and learning, and I hope to join a company that invests …

What is your expectation from our company or what are you looking for? Why you want to start job and not keep studying? Read More »

Why you want to switch? Why you want to join our organization?

There are several reasons why I am considering a switch and why I am particularly interested in joining your organization. Firstly, I believe that your organization aligns well with my professional goals and values. From my research and understanding, your organization has a strong reputation for excellence, innovation, and a positive work culture. This resonates …

Why you want to switch? Why you want to join our organization? Read More »

How to estimate NRV? What is the NRV if your competitor is selling same product at lower price?

Estimating the Net Realizable Value (NRV) involves assessing the expected selling price of an item less any estimated costs necessary to make the sale. When a competitor is selling the same product at a lower price, it does not directly affect NRV. However, if there is a significant difference, it may be an indication that …

How to estimate NRV? What is the NRV if your competitor is selling same product at lower price? Read More »

How will you verify cash if its not possible to attend physical verification? Any specific procedures for covid?

In situations where it is not possible to attend physical verification of cash, such as during the COVID-19 pandemic or other circumstances, auditors can employ alternative procedures to verify the existence and accuracy of cash balances. To verify cash: 1. Ask for the cash to be deposited in a bank and withdrawn 2. Do a …

How will you verify cash if its not possible to attend physical verification? Any specific procedures for covid? Read More »

What is Bank Confirmation? Who Sends it?

Bank confirmation, also known as a bank confirmation letter or bank confirmation request, is a formal inquiry sent by the auditor to the company’s financial institution(s) to obtain independent verification of the client’s bank balances, loans, and other related information. The bank confirmation serves as an important audit procedure to confirm the accuracy and completeness …

What is Bank Confirmation? Who Sends it? Read More »

Which balance would you like to verify the most while conducting statutory Audit? What is BRS (Bank Reconciliation Statement)? How do you use BRS in audit of cash balance?

As a statutory auditor, one of the most critical balances to verify is the cash balance. Cash is a highly liquid asset and is susceptible to misappropriation or misstatement, making it essential to ensure its accuracy. To verify the cash balance, an auditor may adopt the following procedures: 1. Bank Reconciliation: The auditor performs a …

Which balance would you like to verify the most while conducting statutory Audit? What is BRS (Bank Reconciliation Statement)? How do you use BRS in audit of cash balance? Read More »

How do you check completeness assertion while performing audit of accounts payable?

When performing an audit of accounts payable, ensuring the completeness assertion is crucial. Here are some procedures an auditor may adopt to check completeness: 1. Review of Purchase Requisitions and Orders: The auditor can examine the company’s purchase requisitions and purchase orders to verify that all authorized purchases have been properly recorded. This helps ensure …

How do you check completeness assertion while performing audit of accounts payable? Read More »

How will you test the warranty in revenue?

When testing the warranty in revenue, the auditor may adopt the following procedures to ensure its accuracy and completeness: 1. Review of Warranty Policies: The auditor should understand the company’s warranty policies and procedures. This includes reviewing the terms and conditions of warranties, the length of the warranty period, and any specific criteria or limitations. …

How will you test the warranty in revenue? Read More »

How do you verify Fixed Assets and what procedures will you apply if there were huge additions in Fixed Assets?

Regarding the verification of fixed assets with significant additions, the auditor may adopt the following procedures: 1. Physical Inspection: The auditor can physically inspect the fixed assets to verify their existence, condition, and location. This may involve conducting site visits, examining asset tags or labels, and comparing the physical assets to the fixed asset register. …

How do you verify Fixed Assets and what procedures will you apply if there were huge additions in Fixed Assets? Read More »

There are 50 bank accounts having no balance, 120 bank accounts having very minimum balance then what procedures will you adopt to verify them?

When dealing with bank accounts that have no balance or very minimum balance, the auditor may adopt the following procedures to verify them: 1. Inquiry and Documentation Review: The auditor can inquire with the management about the purpose and nature of these bank accounts. Additionally, they can review the account opening documents, bank statements, and …

There are 50 bank accounts having no balance, 120 bank accounts having very minimum balance then what procedures will you adopt to verify them? Read More »

Suppose the company is a big brand in Pen manufacturing industry holding more than 150 bank accounts having balance of 1000cr. What audit procedures will you adopt? Will you verify all the bank accounts or else do some sampling checks? Reason if you verify all the bank accounts?

When dealing with a company that has a large number of bank accounts and a significant balance, it may not be practical or efficient to verify each individual bank account during the audit process. In such cases, auditors often employ sampling techniques to select a representative sample of bank accounts for detailed verification. The decision …

Suppose the company is a big brand in Pen manufacturing industry holding more than 150 bank accounts having balance of 1000cr. What audit procedures will you adopt? Will you verify all the bank accounts or else do some sampling checks? Reason if you verify all the bank accounts? Read More »

Other than balance confirmation what procedures will you adopt for audit of cash and bank balance?

Apart from balance confirmation, there are several procedures an auditor can adopt for the audit of cash and bank balances. These procedures aim to provide sufficient and appropriate audit evidence regarding the existence, ownership, completeness, and valuation of cash and bank balances. Some of these procedures include: 1. Bank Reconciliation: Obtain and review bank reconciliations …

Other than balance confirmation what procedures will you adopt for audit of cash and bank balance? Read More »

If a company have two Government companies as clients which are comprising of almost 30% of trade receivables and they are not responding to management at all, how will you respond as an auditor?

As an auditor, if two government companies comprising approximately 30% of trade receivables are not responding to the management, it is a matter of concern that requires appropriate action. The following steps can be taken in response to this situation: 1. Communication: Engage in direct communication with the management of the audited company to express …

If a company have two Government companies as clients which are comprising of almost 30% of trade receivables and they are not responding to management at all, how will you respond as an auditor? Read More »

If you have debtors balance of Rs 2 crore, and having more than 200 customers then as Statutory Auditor of the Company how will you verify the same?

As the Statutory Auditor of the company, verifying a debtors balance of Rs 2 crore with more than 200 customers requires a systematic approach to ensure accuracy and completeness. The following steps can be taken: 1. Planning: Develop an audit plan specifically tailored to address the large number of customers and the significant debtors balance. …

If you have debtors balance of Rs 2 crore, and having more than 200 customers then as Statutory Auditor of the Company how will you verify the same? Read More »

How you deal if the balance confirmation is mismatch while conducting audit of trade receivables.

When encountering a mismatch in balance confirmation while auditing trade receivables, the following steps can be taken to resolve the discrepancy: 1. Review Documentation: Carefully review the correspondence between the audited entity and its customers regarding the balance confirmation requests and responses. Examine the terms, dates, and any relevant supporting documentation, such as invoices, contracts, …

How you deal if the balance confirmation is mismatch while conducting audit of trade receivables. Read More »

How do you value Raw material as per relevant IND AS?

The valuation of raw materials under the relevant Indian Accounting Standards (Ind AS) follows the principle of “lower of cost and net realizable value” (LCNRV). This principle is similar to the “lower of cost or market” (LCM) principle under the previous Indian Generally Accepted Accounting Principles (GAAP). According to Ind AS 2, Inventories, raw materials …

How do you value Raw material as per relevant IND AS? Read More »

What are the DTA creation criteria’s as per Ind AS and how they are different from AS?

Deferred Tax Assets (DTAs) are recognized under both the previous Indian Accounting Standards (AS) and the current Indian Accounting Standards (Ind AS), but there are some differences in the criteria for their recognition. Under AS, DTAs were recognized only to the extent that there was virtual certainty of sufficient future taxable income against which the …

What are the DTA creation criteria’s as per Ind AS and how they are different from AS? Read More »

Difference between virtual certainty and reasonable certainty?

In the context of financial reporting and accounting, “virtual certainty” and “reasonable certainty” are terms used to describe the level of confidence or likelihood associated with the recognition and measurement of certain events or amounts. While they both imply a high degree of confidence, there is a subtle difference between the two: 1. Virtual Certainty: …

Difference between virtual certainty and reasonable certainty? Read More »

What are the areas of work you are currently working on your ongoing project?

In my ongoing project, I am currently working on several key areas to ensure its success. These areas can be summarized as follows: 1. Project Planning and Execution: I am involved in the initial stages of project planning, including defining project objectives, scope, and deliverables. I am responsible for creating a detailed project plan, identifying …

What are the areas of work you are currently working on your ongoing project? Read More »

If you don’t have any subordinates working with you, then how do you manage work?

When faced with managing work without subordinates, it’s important to utilize effective self-management techniques to ensure productivity and success. Here are some strategies for managing work independently: 1. Prioritization: Assess tasks based on their urgency and importance. Create a to-do list or use task management tools to prioritize and organize your workload. Focus on high-priority …

If you don’t have any subordinates working with you, then how do you manage work? Read More »

If you are a senior, then how do you train and manage your subordinates even if you have more work and less time?

As a senior, it is essential to effectively train and manage subordinates even when faced with a heavy workload and limited time. Here are a few strategies to accomplish this: 1. Prioritize and delegate: Assess the tasks at hand and prioritize them based on their importance and urgency. Delegate appropriate responsibilities to subordinates based on …

If you are a senior, then how do you train and manage your subordinates even if you have more work and less time? Read More »

On what basis performance materiality is set and what are the criteria to set it or change it? If you want to change it what things are to be kept in mind?

Performance materiality is the level of materiality set for specific accounts or classes of transactions during an audit. It is determined by the auditor based on their professional judgment and considers the overall financial statements’ materiality level. When setting performance materiality, auditors consider several factors: 1. Overall materiality: The materiality level for the financial statements …

On what basis performance materiality is set and what are the criteria to set it or change it? If you want to change it what things are to be kept in mind? Read More »

What do you mean by walkthroughs and control testings?

In the context of auditing, walkthroughs and control testing are two important procedures used to assess the effectiveness of a company’s internal controls. Walkthroughs: A walkthrough is a step-by-step review of a process or system to gain an understanding of its design and operation. It involves following a transaction from its initiation to its final …

What do you mean by walkthroughs and control testings? Read More »

What is MRL and why it is used and who takes it? If not received, then what will be the effect on audit opinion in audit report?

MRL stands for Management Representation Letter. It is a letter obtained by the auditor from the management of the audited entity. The purpose of the MRL is to document management’s acknowledgement of its responsibility for the financial statements and to confirm various representations made to the auditor during the audit process. The MRL is used …

What is MRL and why it is used and who takes it? If not received, then what will be the effect on audit opinion in audit report? Read More »

If debtors’ confirmations are not received, then how would you deal with this kind of situation?

If faced with a situation where debtors’ confirmations are not received during an audit, the following steps can be taken: 1. Alternative Audit Procedures: In the absence of debtor confirmations, the auditor can employ alternative audit procedures to obtain sufficient and appropriate audit evidence. This may involve performing analytical procedures, such as comparing the debtor …

If debtors’ confirmations are not received, then how would you deal with this kind of situation? Read More »

Difference between CIBIL and crisil rating.

CIBIL (Credit Information Bureau India Limited) and CRISIL (Credit Rating Information Services of India Limited) are both important entities in the financial industry, but they serve different purposes and have distinct roles: CIBIL is a credit information company that collects and maintains credit-related data of individuals and companies. It operates as a credit bureau and …

Difference between CIBIL and crisil rating. Read More »

What are DSCR and its calculation? Ideal Ratio and its relevance.

DSCR stands for Debt Service Coverage Ratio. It is a financial metric used by lenders to assess a borrower’s ability to meet their debt obligations, specifically interest and principal payments. The DSCR measures the cash flow available to cover debt payments, providing an indication of the borrower’s capacity to service their debt. The calculation of …

What are DSCR and its calculation? Ideal Ratio and its relevance. Read More »

What is important yardstick in assessment of Term Loan?

One important yardstick in the assessment of a term loan is the Debt Service Coverage Ratio (DSCR). DSCR is a financial metric used by lenders to evaluate a borrower’s ability to generate sufficient cash flow to meet their debt obligations. It provides an indication of the borrower’s capacity to repay the loan. DSCR is calculated …

What is important yardstick in assessment of Term Loan? Read More »

What are IRAC norms?

IRAC (Income Recognition, Asset Classification, and Provisioning) norms are guidelines issued by the Reserve Bank of India (RBI) to ensure prudent and transparent recognition of income, classification of assets, and provisioning for potential loan losses by banks and financial institutions. These norms play a crucial role in maintaining the stability and integrity of the banking …

What are IRAC norms? Read More »

Why are Debtor days and Inventory days calculated?

Debtor days and inventory days are calculated to assess the efficiency and effectiveness of a company’s working capital management. These ratios provide valuable insights into the company’s liquidity, cash flow, and operational efficiency. Debtor days, also known as accounts receivable days or average collection period, measures the average number of days it takes for a …

Why are Debtor days and Inventory days calculated? Read More »

What do you know about SFT transaction? (26AS)

SFT stands for Specified Financial Transaction, and it is a term used in the context of tax reporting in India. The concept of SFT was introduced to enhance transparency and curb tax evasion by capturing certain high-value transactions. These transactions are required to be reported by the parties involved to the Income Tax Department. SFT …

What do you know about SFT transaction? (26AS) Read More »

How will you analyse the annual report of a company?

When analyzing the annual report of a company, several key areas should be considered to gain insights into the company’s financial performance, strategies, and overall health. Here is a structured approach to analyzing an annual report: 1. Financial Statements: Review the balance sheet, income statement, and cash flow statement to assess the company’s financial position, …

How will you analyse the annual report of a company? Read More »

What ratios you will look for when giving credit?

When assessing the creditworthiness of a company, several key ratios are commonly considered to evaluate its financial health and ability to repay its obligations. Here are some important ratios to consider when giving credit: 1. Current Ratio: This ratio indicates a company’s ability to cover its short-term obligations with its short-term assets. A higher current …

What ratios you will look for when giving credit? Read More »

Bottom Up Budgeting Vs Top down Budgeting.

Bottom-up budgeting and top-down budgeting are two different approaches to the budgeting process within an organization. Here’s a brief explanation of each: Bottom-up Budgeting: In bottom-up budgeting, the budget is created by involving various departments or teams within the organization. Each department or team prepares its own budget based on its specific needs, objectives, and …

Bottom Up Budgeting Vs Top down Budgeting. Read More »

How do you ensure completeness and accuracy of financial statements?

Ensuring the completeness and accuracy of financial statements is crucial to maintain the integrity of financial reporting. Here are some key measures that can be taken to achieve this: 1. Robust Internal Controls: Implementing strong internal controls is essential to ensure the completeness and accuracy of financial statements. This includes segregation of duties, proper authorization …

How do you ensure completeness and accuracy of financial statements? Read More »

What all constitutes Financial Statement?

Financial statements are key financial documents that provide an overview of a company’s financial performance and position. The main components of financial statements include: 1. Income Statement: Also known as the statement of operations or statement of comprehensive income, the income statement shows the company’s revenues, expenses, gains, and losses over a specific period. It …

What all constitutes Financial Statement? Read More »

What do you understand by FP&A?

FP&A stands for Financial Planning and Analysis. It is a function within an organization that focuses on financial planning, budgeting, forecasting, and financial analysis. The main purpose of FP&A is to support strategic decision-making by providing accurate and timely financial information and insights to management. In FP&A, professionals work closely with various departments, such as …

What do you understand by FP&A? Read More »

What is the difference between accounts receivable and deferred revenue?

Accounts receivable and deferred revenue are both important financial concepts related to revenue recognition, but they represent different aspects of a company’s financial transactions: Accounts Receivable: Accounts receivable (AR) represents the money owed to a company by its customers for goods or services that have been delivered but not yet paid for. It arises when …

What is the difference between accounts receivable and deferred revenue? Read More »

A company has had positive EBITDA for the past 10 years, but it recently went bankrupt. How could this happen?

The scenario you presented, where a company has had positive EBITDA for the past 10 years but recently went bankrupt, may seem contradictory at first. However, it is important to understand that EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is just one measure of a company’s financial performance and does not capture the full …

A company has had positive EBITDA for the past 10 years, but it recently went bankrupt. How could this happen? Read More »

Why due diligence is performed on Audited Financials?

Performing due diligence on audited financials is essential to gain a deeper understanding of a company’s financial health and identify any potential risks or inaccuracies. Here are the key reasons why due diligence is conducted on audited financials: 1. Verification of Financial Information: Audited financial statements are prepared by independent auditors who examine and verify …

Why due diligence is performed on Audited Financials? Read More »

What are free cash flows of firm?

Free cash flows of a firm refer to the cash generated by its operations that is available for distribution to investors, debt repayment, or reinvestment in the business. It represents the cash flow that remains after deducting operating expenses, taxes, and capital expenditures necessary to maintain and expand the company’s operations. Here are some key …

What are free cash flows of firm? Read More »

How do you value a Company?

Valuing a company involves assessing its worth or intrinsic value, which can be determined using various methods. Here are some common approaches to company valuation: 1. Comparable Company Analysis: This method involves comparing the company to similar publicly traded companies or recent transactions in the same industry. Key financial ratios, such as price-to-earnings (P/E), price-to-sales …

How do you value a Company? Read More »

What are the benefits of a company getting listed on an exchange?

Getting listed on an exchange, such as a stock exchange, can provide several benefits for a company. Here are some key advantages: 1. Access to Capital: Listing on an exchange allows a company to tap into the public markets and raise capital by issuing shares to investors. This provides an avenue for significant funding opportunities, …

What are the benefits of a company getting listed on an exchange? Read More »

Why is income statement not affected by changes in inventory?

The income statement is not directly affected by changes in inventory because it follows the matching principle of accounting. The matching principle states that expenses should be recognized in the same period as the revenues they help generate. As a result, the income statement primarily focuses on the recognition of revenues and expenses incurred during …

Why is income statement not affected by changes in inventory? Read More »

What is working capital, and which are the different types of working capital?

Working capital refers to the difference between a company’s current assets and its current liabilities. It represents the funds available to cover day-to-day operations and is a key indicator of a company’s liquidity and short-term financial health. Working capital is essential for meeting short-term obligations, managing inventory, funding operational expenses, and sustaining ongoing business activities. …

What is working capital, and which are the different types of working capital? Read More »

How long usually it take to collect accounts receivable?

The time it takes to collect accounts receivable can vary depending on various factors such as industry practices, company policies, customer payment terms, and the efficiency of the company’s credit and collection processes. In general, the collection period for accounts receivable is measured in days and is commonly referred to as the “Days Sales Outstanding” …

How long usually it take to collect accounts receivable? Read More »

Which method would company use to buy other company – cash, stock or debt. Assuming all else is equal.

Usually, the shareholders of the target prefer getting Cash rather than equity. The acquirer prefers issuing shares. The acquire should issue shares in case the purchase consideration is same in all cases – this is the least risky option. However if there is excess cash and no investment opportunity, cash may be used The method …

Which method would company use to buy other company – cash, stock or debt. Assuming all else is equal. Read More »

Which company would have a higher beta: A manufacturing company or a technology company?

In general, a technology company would likely have a higher beta compared to a manufacturing company. Beta is a measure of a stock’s volatility or sensitivity to market movements. A beta greater than 1 indicates higher volatility, while a beta less than 1 suggests lower volatility compared to the overall market. Technology companies are often …

Which company would have a higher beta: A manufacturing company or a technology company? Read More »

Study Smart: The Ultimate Exam Guide by Yugantar Gupta
Scroll to Top