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
077A company's revenue is growing but its cash flow is not. What is happening?Credit research
Say this
Almost always working capital or revenue recognition. Either the company is selling to customers who are not paying, building inventory it has not sold, or recognising revenue ahead of the cash.
Then walk it
- Check receivable days first. Rising days sales outstanding means sales are being made on easier terms, or to weaker customers, or channel-stuffed into distributors.
- Then inventory days. Building inventory ahead of demand consumes cash and usually precedes a markdown.
- Then payables. If days payable outstanding is falling, suppliers have tightened terms, which is often a sign they are worried about the company.
- Then revenue recognition policy. Percentage-of-completion accounting, long-term contracts and bill-and-hold arrangements all allow revenue well before cash.
- Then capitalisation: if development costs or contract acquisition costs are being capitalised, profit is protected while cash is spent.
- Growth itself explains some of it legitimately: a fast-growing business funds working capital, so cash lags revenue by construction. The diagnostic question is whether the working capital intensity, measured as a percentage of revenue, is stable or deteriorating. Stable is growth; deteriorating is a problem.
Where candidates lose it
Concluding fraud immediately. Fast growth legitimately consumes cash. The discriminating test is whether working capital as a percentage of sales is stable or worsening, and saying that distinguishes analysis from alarm.
Expect next
- How would you tell growth from deterioration?
- What is channel stuffing and how would you spot it?
- What would you ask management?
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.