Q1
Walk me through how you would build a 3-statement financial model (income statement, balance sheet, and cash flow statement) for a company, and explain the key linkages between each statement.
Why they ask this:* Financial modeling is a core competency for analysts. This tests your understanding of accounting principles, interconnected statements, and ability to translate business data into analytical frameworks.
Q2
Explain the difference between accrual accounting and cash-basis accounting, and describe a scenario where the two would produce materially different results.
Why they ask this:* This assesses fundamental accounting knowledge critical to accurate financial analysis and your ability to adjust reported numbers for meaningful insights.
Q3
Walk me through your approach to analyzing a company's working capital trends. What metrics would you calculate, and what would negative trends signal to you?
Why they ask this:* Working capital analysis is essential for assessing operational efficiency and liquidity. This reveals whether you can translate balance sheet items into actionable business insights.
Q4
Describe your experience with Excel functions and financial tools (VBA, SQL, Tableau, etc.). Give a specific example of how you automated a recurring analysis or built a dashboard.