Equity Research interview preparation
Sell side and buy side. Every question is either traced to a named firm from a public candidate report, or tagged at desk level when we could not trace it. Answers lead with the point, then the mechanism, then the limitation.
100 questions, mapped to the firms that asked them
- Questions
- 100
- Traced to a firm
- 72
- Firms
- 45
- Updated
- September 2026
018What is the effect on the three statements of selling an asset?JefferiesEquity Research · New York · 2026
Say this
Depends on the sale price versus book value. Sell an asset with a book value of $100 for $120: you book a $20 gain, taxed; cash rises by the proceeds less the tax; and the asset leaves the balance sheet at its book value.
Then walk it
- Income statement: a $20 gain. At 25 percent tax, net income rises $15.
- Cash flow: start at net income plus $15, reverse out the $20 non-cash gain in operating, then show the full $120 proceeds in investing. Net cash movement is $115, which is the proceeds less $5 of tax.
- Balance sheet: cash up $115, asset down $100, retained earnings up $15. It balances.
- For a research analyst the follow-through matters more than the mechanics: the gain is non-recurring, so it must be stripped out of the earnings base before you apply a multiple.
- And you lose the asset's future earnings, so the forecast has to come down. A company that beats on a disposal gain while its operating business shrinks is exactly the kind of thing a research note should call out.
Where candidates lose it
Getting the mechanics right and ignoring the analytical point. On the research side, the expected addition is that the gain is non-recurring and that forward earnings fall with the disposed asset.
Expect next
- How would you adjust your earnings base for it?
- What if they sold it below book value?
- How do you treat a company that regularly books disposal gains?
Reported by candidates at Jefferies (Equity Research, New York, 2026). Source: Wall Street Oasis.
Firm tags come from public, anonymous candidate reports on Wall Street Oasis: strong signal, not sworn testimony. Firms are named as the places a question was reported, not as partners of Fin Maverick. Answers are written for this page to show how to think out loud; they are not scripts to recite.