Finance Interview Questions

Finance sector is a very crucial sector in every corporate organization. Cash flows, balance sheets, profits and losses of the company etc. are determined by this department of the organization. Naturally, people who work in this section are expected to be perfectionists at work.

Interviews for a post of finance director or a finance manager, involves a lot of technical questioning and problem solving based on industrial finance problems. A finance director or a manager is expected to be aware of all the terms and technical jargons related to finance and economics. Here are 30 interviewing questions that a finance job applicant may have to face at a corporate interview.

  • What is a cash flow statement? What does a cash flow statement signify?
  • What are the three segments of the cash flow statement?
  • Here is a specimen of a company's balance sheet. Would you read it for us?
  • What is EVA? How do you calculate EVA?
  • How does EVA help the financial managers?
  • How would you explain Return on Equity (ROE)?
  • What does Return on Investment (ROI) mean?
  • What is the difference between ROI and ROE?
  • How do we calculate the ROE/ ROI?
  • How can you explain Leverage Ratios?
  • How many types of Leverage Ratios can you name?
  • Explain Debt to Equity Ratio.
  • What is Acid Test Ratio? What is the use of Acid Test Ratio?
  • How would you explain Break-Even Point?
  • Can you explain the Margin of safety?
  • Speaking graphically, does the margin of safety lie above or below the break even point?
  • Explain the three terms in brief - Average Collection Period, Average Obligation Period and Average Inventory Period.
  • Name a few Turnover Ratios.
  • What does a high Accounts Receivable Turnover signify?
  • What does a low Accounts Receivable Turnover signify?
  • How to measure Return on Capital invested?
  • What do you understand by Retained Earnings Growth Rate?
  • Define bankruptcy.
  • What are the different ways to pay dividends?
  • Explain the difference between a stockholder and a bondholder.
  • How would you explain Direct Public Offering?
  • What are the advantages and disadvantages of DPO?
  • Under what circumstances do stocks buy back takes place?
  • How do buy backs help in improving the financial ratios of the company?
  • Is there any difference between Initial Public Offering (IPO) and Direct Public Offering (DPO)?
  • How would you rectify discrepancies in balance sheet/ profit and loss account?
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