2007 sophomore year in college. Professor assigned each students 3 companys to research and follow during the semester and prepare the entire business analysis as final project grade.
A good financial analyst is one who is able to bring out the best from a huge amount of data. A good financial analyst is one who has the capability to transfer the data into a right financial decision about what is to be bought and what is to be sold.
The mortgage crisis is a product caused by financial engineering. While it is wonderful to create products for shareholders, we also need to create an environment where all stakeholders can benefit. So, the mortgage crisis pains me.
The analysis of expenses and revenue which is predicted to be produced or incurred in future is called quarterly forecasting. The product or the service and its respect and demand in the market are mentioned as revenues. At times when it is mentioned that revenues would boom, it means that profits will enhance and also the expenses would elevate when compared with incomes.
I think I possess adequate qualification and experience required for this position. I m positive that my knowledge and skill will further enhance the analytical and reporting structure of this company. Hence, I consider myself a great fit for this position.
When such question is put forward, make sure to emphasize more on the good reputation of the company. Mention that the environment of the company is challenging and you are ready to face challenges. You can also mention that you can work together with the company and help the organization grow.
This question usually comes up at the end of the interview and important to be focused. Avoid asking questions related to perks, leave, place of posting, salary and more. Instead, you can ask them about any development or induction programs that take place in the organization. Otherwise, you can also ask for a feedback and mention that you would evaluate and enhance strength and other shortcomings.
I was put in a group one time in school for a project, and some of our members did not mesh well with others, as such, they did not help towards the project, and ultimately the quality of the project ended up being poor because others had to over compensate.
Deferred tax asset arises when a company actually pays more in taxes to the IRS than they show as an expense on their income statement in a reporting period.
Differences in revenue recognition, expense recognition (such as warranty expense), and net operating losses (NOLs) can create deferred tax assets.
The book which has the original entry is called a journal. The book is mandatory one as it has all the transactions that associate to the company for the specific financial year. The journal can also be mentioned as the mother of the ledger. In this scenario, all the accounts are portioned as debit and credit as per rules. The ledger is one which has particular accounts which is taken from the original journal.
When such a question is put forward, make sure to leave the choice to the employer. Ask them their convenient timing to join and be ready for the same. In case, you have any formalities to be completed with the previous employer you can mention the same, but do not drag up in joining the job. So mention the employer that you would join anytime they mention.
This is one main question which helps the employer polish your qualification appropriate to the job role. Mention your knowledge, experience, skill and ability appropriate to the job role. Pen down a list of strong points, which are a perfect match with the job role. Run through the job requirement again and make your strengths related. Mention your strengths in your resume as well as cover letter.
The right way to move forward with this question is to mention the ways you would utilize your financial analyst skills and experiences in the job role that you would be hired for. You can mention that you are a person who is boosted by challenges and also possesses the capacity to face any challenges in the career. You can also make a point that you have the skills and knowledge to handle any challenge in the job. Remember to mention the goals as well as challenges you met prior.
It Tottally depends what type of forcast we are doing.... And what is the purpose I.. E if we want accurate forcast with no errors than we need to go with expert panel method and nned to analyse market senarios.. And this method also work in case there is no historical data available w. R. T a new product.. There is a General method used Trend analysis and historical Data sheets to get close to most accurate data forcast.
You can mention that you have been working for so many years with excellent skills and abilities but have not been promoted at the right time. You can also mention that you are ready to face challenges but your previous job isn't challenging. Other reasons can be that your company paid you late, or you may have traveling issues and more. Remember not to talk ill about your previous company, or if you had not achieved your task or if you were punished. Let the answer be a genuine one which can be accepted by the employer.
For this finance related interview question, the candidate should formulate the answer by associating his skills, education, personality, and experience along with the job role. To answer this question the candidate must understand the job description and also the culture of the company. You can also show that you're a good team player by linking them with examples. When you do not possess much of skills, experience or qualification, it is important to show your energy and passion. Employers look out for charismatic people who have complete energy and confidence in their speech. And hence, it is mandatory to present yourself as a confident, motivated and energetic individual.
The usual practice in conducting a financial analysis is called financial modeling. It can also be mentioned as a quantitative analysis which is mainly utilized for asset pricing or for general corporate finance. The important aspect of financial modeling is that hypothetical variables are utilized in the formula so that the impact on economic conditions, profitability, and market behavior can be determined. It is always advisable to present your answers with an example. You can mention that financial modeling can be used to find out the jet fuel cost for airlines for the annual rise of 5% in crude oil for future years.
Well interpreting financial data is one of the main tasks of “Financial Analyst”. For interpreting data affecting investment programs one should have the deep knowledge of current trends in business practices, price, yield, stability and economic influences and have the ability to develop forecast reports, spreadsheets and statistical software packages.
This is a very important finance question for interview and the candidate needs to prepare for the same. The candidate should make sure to visit the company website, run through the about us page and careers page. To get to know more about the company the candidate should go through the LinkedIn page of the company. To know the latest updates and news about the company, google search as press releases along with the company name. It is not necessary to mention everything you learned, but mention the services and products the company sells. Give a data about the period through which the company has been running the business. Mention the mission statement of the company, the culture of the company, and how the values associate with your personality.
Deferred tax liability is a tax expense amount reported on a company's income statement that is not actually paid to the IRS in that time period, but is expected to be paid in the future. It arises because when a company actually pays less in taxes to the IRS than they show as an expense on their income statement in a reporting period.
Differences in depreciation expense between book reporting (GAAP) and IRS reporting can lead to differences in income between the two, which ultimately leads to differences in tax expense reported in the financial statements and taxes payable to the IRS.
Yes, I manage the annual budget preparation process. I send out a template to each department heads requesting their budget numbers for the next fiscal year. Once I get all budget requests back, I compile the information into one document and conduct a meeting to review each budget with the CEO, CEO, director of Operations and each of the department heads. Then compile the final numbers and together with the CEO, ratify the budget.
Two examples include deterioration of working capital (i.e. increasing accounts receivable, lowering accounts payable), and financial shenanigans.
Accounts Receivable Impact Since accounts receivable and inventory are balance sheet items, they do not directly affect your company's income statement. Fluctuations or changes in these two current assets always appear on the balance sheet and on the cash flow statement. Revenues on the income statement show up as A/Rs or cash on the balance sheet and cash flow statement. The payment of A/Rs by customers converts A/Rs to cash, which in no way impacts the income statement. Inventory Impact As your company sells products, it reflects its inventory costs in the cost of goods sold line item on the income statement. Therefore, any fluctuations or modifications to the cost basis of that inventory will impact the income statement via the cost of goods sold. However, as with A/Rs, the cost of goods sold on the income statement already reflects inventory valuations on the balance sheet, so inventory-level fluctuations do not affect the income statement.
There is no specific answer to this analyst interview question and hence, it is mandatory to mention a reasonable point of evaluation and explain the context for using the metrics. When you estimate a company, mention the first point as the operating margin profit as the metric. Mention that you opt for this metric because it shows the management of the company overall apart from the basic profitability. The price earnings to growth ratio can also be mentioned as a single most complete equity valuation metric. You can give a reason that it considers projected earnings growth rate and also higher ranked commonly used price/ earnings ratio (P/E). Make sure to pick any evaluation metric that you prefer is the best. The main trick in answering this question is explaining the strength of the particular metric that you mention.
Initially, there is no impact (income statement); cash goes down, while PP&E goes up (balance sheet), and the purchase of PP&E is a cash outflow (cash flow statement)
Over the life of the asset: depreciation reduces net income (income statement); PP&E goes down by depreciation, while retained earnings go down (balance sheet); and depreciation is added back (because it is a non-cash expense that reduced net income) in the cash from operations section (cash flow statement).
If the political scenario in greece get stabilized with the structural reforms there is possibility of coming out of the crisis after the bail out is provided otherwise it seems difficult at the moment.
Absolutely. Two examples involve unsustainable improvements in working capital (a company is selling off inventory and delaying payables), and another example involves lack of revenues going forward.in the pipeline
☛ Imagine that you hand in a report you are not satisfied with. Later you discover that you made a mistake although your supervisor doesn't notice. How would you handle it?
☛ Envisage that you are talking to someone who has no financial background. How would you explain the concept of solvency/IRR/ROE etc.
☛ If you had to make a decision about a loan, what are the most important elements you need to consider?
☛ Envisage senior management asks you to create a quick report presenting the financial data they are most interested in. What would you include in that report?
☛ Imagine you have to convince an investor of the company's overall health. What are some important concepts or metrics you need to present?
☛ Suppose the company shows positive cash flow and management asks you if that means the company is doing well. What do you reply?
☛ How do your credentials make you better at your job?
☛ Do you have experience in [________]? (e.g. benchmarking, DCF analysis)
☛ What is NPV and where would you use it?
☛ Name the 4 financial statements and how they connect with each other
☛ Describe and explain a cash flow statement
☛ If debts owed to the company increase, how would the income statement change?
☛ Name a few ratios that can help you evaluate a company
☛ What information/model would you need to produce an annual forecasting report?
☛ How would you rate your proficiency in Excel?
☛ Have you ever used this (specific) financial analysis software?
☛ What methods could you use for selecting a project? How would WACC and IRR help you?
☛ What is important to consider/calculate when reaching a decision on an investment?
☛ What developments do you see in the economy of the (specific) industry?
☛ Do you follow the stock market? Which stocks in particular?
☛ Tell me about a time you had to handle large amounts of data. How did you ensure accuracy?
☛ Give an example of a time you found a mistake among a large set of data
☛ Have you ever disagreed with your manager and how did you handle it?
☛ What was the most difficult problem you've had to solve and how did you do it?
☛ What do you think was your most successful project?
☛ Describe a time when your knowledge of current events helped you produce better results
☛ Have you ever fallen behind schedule for a project? What did you do to catch up?
☛ Describe a time when a piece of your advice as a financial analyst helped senior management make a better decision?
☛ Tell us about a time you made a bad financial decision. How would you avoid that happening again?
☛ Why have you chosen the career of financial analyst? (when answering, focus on the love to numbers and good analytical skills you have)
☛ What makes a good financial analyst nowadays? (focus in your answer on the aspect of being able to find the best within huge amount of data and transferring it into final decisions what to buy and what to sell.)
☛ Why have you chosen our company? (stress the good reputation, challenging environment and most importantly that you really feel you can help this company to do better)
☛ From your point of view, what are the key characteristics of a good financial analysis? (this depends purely on your philosophy. However, taking right decisions in right time – before the others figure it out, is for sure a good attribute of good financial analysis)
☛ Are you familiar with ad hoc analysis?
☛ When did you make your first financial analysis in life? (Try to use your imagination. Maybe you can find some financial analysis also in your personal life.)
☛ What methodologies to you use while doing your financial analysis?
☛ Have you ever used any profitability models for forecasting a project?
☛ Where do you see US financial markets heading in the near future?
☛ What reporting methods do you prefer to use?
☛ Who do you think financial analyst should be in direct touch with in the company, and who should he consult?
☛ What do you consider as the biggest mistake ever when it comes to transactions on financial markets?
Since our cash flow statement starts with net income, an increase in accounts receivable is an adjustment to net income to reflect the fact that the company never actually received those funds.
Business concerns who desire to earn profits by functioning business are ones who use profit and loss account. In the same manner, trusts, non-profit organizations make use of income and expenditure statement. It is the trading organizations that prepare P&L account in order to find out the net profit or loss of the organization's operation. Non-trading organizations prepare income and expenditure account, to find out if they have made a profit to run their business further or is in a loss.
I was new to a training and development team that was in the process of documenting business operational procedures for conversion to a new SAP system. I was assigned to create a presentation on the benefits of converting to the new system for the deployment Director. I was given little information on what the Director actually wanted and minimal direction on who to contact to capture details on the system. Action:I created an outline of what
Management was looking to make a change in the company they were using for their uniforms. Upon analyzing the new potential contract it was going to cost us more in the long run by changing companies so they decided to stay with the current uniform company.
My strength is heading up seminars for sales explaining the requirements of the credit department in the paint industry. I first took a quick survey from the sales staff asking question regarding their concerns about our credit department and took that information back to management.
To answer this question it solely depends on one's philosophy. The main characteristic in order to become a good financial analyst is that he should possess the capability to take the right financial decision at the appropriate time before other pop up with a decision.
The evaluation of performance by means of variance is mentioned as variance analysis. Its timely reporting is one which enhances the opportunity for remedial action. You can mention your previous example about variance analysis and the way you used it. in order to answer this question make sure to identify the issue, discourse about variance analysis, its reason and impact and also a projected corrective measure.
For answering this accounting interview question you must not mention the specific program but mention the usage of one program over the other. You can also mention that you would are willing and have the capability to use any program that the organization opts. You can mention that Microsoft excel is the one you prefer as it provides more of statistical and analytical references. In the same manner, to have an enhanced view of graphs or charts which assist in illustration of points, you can mention reports ultimate.
Irrespective of whatever you have used, mention that you have utilized multiple software programs in preparation of reports. Also never forget to mention that you have the ability to capture and become proficient in whatever program the organization follows for the preparation of reports.
40. Explain me why do capital expenditures increase assets (PP&E), while other cash outflows, like paying salary, taxes, etc., do not create any asset, and instead instantly create an expense on the income statement that reduces equity via retained earnings?
Capital expenditures are capitalized because of the timing of their estimated benefits – the lemonade stand will benefit the firm for many years. The employees' work, on the other hand, benefits the period in which the wages are generated only and should be expensed then. This is what differentiates an asset from an expense.
Goodwill is an asset that captures excess of the purchase price over fair market value of an acquired business. Let's walk through the following example: Acquirer buys Target for $500m in cash. Target has 1 asset: PPE with book value of $100, debt of $50m, and equity of $50m = book value (A-L) of $50m.
☛ Acquirer records cash decline of $500 to finance acquisition
☛ Acquirer's PP&E increases by $100m
☛ Acquirer's debt increases by $50m
☛ Acquirer records goodwill of $450m
Net income flows into retained earnings.
I want to eventually have a higher degree, and eventually with as a due diligence analyst.
My personality is positive and I enjoy credit and collections. Making a good situation from a bad one. Collecting funds for delinquent accounts by respecting clients and being professional at all times.
Nothing actually frustrate me, when my financial analysis does not go down well, I exploit all technicalities to arrive at convincing analysis.
Cash flow statement because you get a real overview of how the company can manage to pay for it's operations and future growth.
Start with net income, go line by line through major adjustments (depreciation, changes in working capital and deferred taxes) to arrive at cash flows from operating activities.
☛ Mention capital expenditures, asset sales, purchase of intangible assets, and purchase/sale of investment securities to arrive at cash flow from investing activities.
☛ Mention repurchase/issuance of debt and equity and paying out dividends to arrive at cash flow from financing activities.
☛ Adding cash flows from operations, cash flows from investments, and cash flows from financing gets you to total change of cash.
☛ Beginning-of-period cash balance plus change in cash allows you to arrive at end-of-period cash balance.
The financial analyst position is one of the money making position in a financial sector. It is one of the crucial position in any industry or organization. Now let us see the roles and responsibilities,
Gathering of information from trade and bank references. Review the current account if it is a current client and compare financial statements.
Analyzing the data, talking the data over with colleagues, and finally formatting the reports.
I read business times of different news paper to understand the current economic trend and money market trent.
Period of project, incoming fund flow and cash out flow, market condition, work certification procedure and payment period, client reputation, forex flatuation chances, etc.
Increase customer base by a percent.
I enjoy working with data and excel.
Break even point, this would be the analysis to determine the point at which revenue received equals the costs associated with receiving the revenue.
By asking this question the employer would test your ambition and ability to develop yourself and also plan for your future as a financial analyst. When you have not decided on the goals then mention that you're busy with the organization and its duties and hence focus on long-term goals. If you have short term goals or career oriented goals then you can mention them that what you desire to become in the next 2 or 5 years.
This are some tricky interview questions for analyst and you would really lose it if you answer it straight away. Remember not to answer the question where you can frame your answer in a way where you can mention that it's a tough question or ask the employer to tell you the range for the position. You can just answer that it depends on the financial analyst responsibilities and job roles.
The role of financial analysts is to audit or inspect the economy. Along with this, they also assist the industries and companies to decide in investment decisions for banks, corporations, investment firms and insurance companies. They are said to be the title for many chore responsibilities which can be budgeting, accounting, or cost analysis. The main aspect required to attend a financial analyst interview is to present your skills in analyzing the economic conditions and understanding the basic financial analysis.
Working capital is defined as current assets minus current liabilities; it tells the financial statement user how much cash is tied up in the business through items such as receivables and inventories and also how much cash is going to be needed to pay off short term obligations in the next 12 months.