Financial Analysis interview preparation

Questions

100

Traced to a firm

42

Firms

28

Updated

September 2026

Asked at

All firmsMoody's7Bain Capital3SSState Street3AMAres Management2BLBlackRock2DED.E. Shaw2MSMorgan Stanley2Oaktree Capital Management2S&P Global2Bridgewater Associates1Citadel1FTFranklin Templeton1Golub Capital1HWHarris Williams1Houlihan Lokey1J.P. Morgan1Jane Street1MWMarshall Wace1Millennium Management1Morningstar1PIMCO1Sycamore Partners1TSTruist Securities1Two Sigma1Vanguard1WMWellington Management1Wells Fargo Securities1Wolverine Trading1

Topic

All topicsThree statements9Accounting policy and standards5Working capital and cash7Ratio analysis8Forecasting and budgeting9Variance and management reporting7Unit economics and costing8Capital budgeting7Cost of capital and valuation7Markets and rates5Modelling, Excel and data8Business partnering6Brainteasers and estimation4Fit and career10

Level

AnyCoreIntermediateHard

Type

AnyTechnicalCaseBrainteaserMarket viewFit

1. 059What is better: a one rupee increase in EBITDA or a one rupee decrease in debt?Capital budgetingIntermediatetechnicalAMAres ManagementPrivate Equity · New York · 2026

   Say this

   The EBITDA rupee, as long as it is recurring, because it is capitalised at the multiple. At eight times EBITDA, one rupee of extra EBITDA adds eight rupees of enterprise value and therefore eight of equity value. One rupee less debt adds exactly one rupee of equity value.

   Then walk it

   1. The arithmetic: equity value equals EBITDA times the multiple, less net debt. Differentiate on each term. A rupee of EBITDA is worth the multiple; a rupee of debt repayment is worth one, rupee for rupee.
   2. So at any multiple above one times, which is every real business, EBITDA wins on value. At eight times it wins eight to one.
   3. But the answer depends on the word recurring. A one-off rupee of EBITDA is worth one rupee, not eight, and the whole question is whether a buyer will capitalise it. That is why sponsors fight over which addbacks are run-rate.
   4. Then the cases where debt reduction wins. If you are close to a covenant breach, the rupee that keeps you compliant is worth far more than its face value, because a breach can cost you the company. Same if you are facing a refinancing wall in a shut credit market.
   5. There is also a second-order effect in favour of EBITDA: higher EBITDA lowers leverage on the same debt, which can reduce the interest margin on a ratchet and improve the rating. So EBITDA improves both terms and debt repayment improves only one.
   6. So my answer is EBITDA, by the multiple, with the caveat that it has to be recurring and that liquidity risk trumps value arithmetic when you are near a covenant.

   Where candidates lose it

   Answering 'they are the same, one rupee is one rupee'. The point is that EBITDA is capitalised and debt repayment is not. But an answer with no caveat is also weak: near a covenant breach, deleveraging genuinely wins.

   Expect next

   • At what multiple would you be indifferent?
   • What if the EBITDA improvement is a one-off?
   • How does a leverage ratchet change your answer?

   Reported by candidates at Ares Management (Private Equity, New York, 2026). Source: Wall Street Oasis.

2. 060Lease it or buy it. How do you decide?Capital budgetingIntermediatetechnicalCorporate financeTreasury

   Say this

   It is a financing decision, not an investment one, so first settle whether the asset is worth having at all. Then compare the after-tax cash flows of buying, including the depreciation shield and the residual value, against the after-tax lease payments, discounted at your after-tax cost of debt.

   Then walk it

   1. Separate the two questions. Whether to have the machine is an NPV question at WACC. How to fund it is a lease-versus-borrow question, and because both alternatives are contractual and low-risk, you discount at the after-tax cost of debt, not WACC.
   2. Buy case cash flows: the purchase outflow, the tax shield on depreciation each year, maintenance and insurance you now bear, and the residual value after tax at the end.
   3. Lease case cash flows: the rentals, fully tax-deductible as they are paid, usually with maintenance included in an operating lease, and no residual value because you never owned it.
   4. The net advantage to leasing is the difference in present values. In practice leasing wins where the lessor has a better tax position than you, where the asset obsoletes fast so you want the residual risk transferred, or where you cannot access the debt to buy it.
   5. For an Indian company two specifics matter: whether you can use the depreciation shield at all, because a loss-making or MAT-paying company cannot, and the GST treatment, since input credit on the asset purchase versus on the rentals affects the cash timing.
   6. And since Ind AS 116 the accounting difference has largely gone, both routes put an asset and a liability on the balance sheet. So decide on cash and tax, not on how it will look in the ratios, and say that explicitly if someone argues for leasing to keep debt off the balance sheet.

   Where candidates lose it

   Discounting at WACC. This is a debt-equivalent comparison, so the after-tax cost of debt is the right rate. The second trap is arguing for leasing to keep the liability off the balance sheet, which Ind AS 116 has ended.

   Expect next

   • What if the company is loss-making?
   • Why does the lessor's tax position matter?
   • Does Ind AS 116 change the economics or just the presentation?
3. 063How would you price a bond in today's market?Cost of capital and valuationIntermediatetechnicalJ.P. MorganGeneralist · Columbus · 2026

   Say this

   Discount the contractual cash flows at the yield the market currently demands for that credit and that maturity. Price is the present value of the coupons plus the present value of the principal, and the whole question is what discount rate you use.

   Then walk it

   1. Build the rate from the bottom up: the risk-free yield for the matching maturity, plus a credit spread for the issuer's rating, plus a liquidity premium if the paper trades thinly. For an Indian corporate bond that is the G-sec yield of the same tenor plus the spread for AA or whatever the rating is.
   2. Then discount. A five-year bond with an 8 percent annual coupon, priced when the market demands 9 percent, trades at a discount: roughly 96 rupees per 100 of face. If the market demands 7, it trades around 104. Price and yield always move in opposite directions.
   3. Say the convention issues out loud: semi-annual versus annual coupons, day-count, and clean versus dirty price, because accrued interest is added on settlement.
   4. The better practice for a portfolio is to discount each cash flow at its own zero-coupon rate off the spot curve rather than one yield to maturity, because YTM embeds a flat-curve assumption that is never true.
   5. Then the features that change everything: a call option caps the upside when rates fall, a put does the opposite, a floating-rate note reprices so its price barely moves, and a convertible is a bond plus an equity option.
   6. The honest limitation: for an illiquid Indian corporate bond there may be no observable spread, so you interpolate from comparable paper and the price is a model output with a range, not a market price. I would say that rather than present a single figure with two decimals.

   Where candidates lose it

   Giving the present-value formula without saying where the discount rate comes from. The rate is the answer: risk-free plus credit spread plus liquidity. Also state the price-yield inverse relationship, because that is what they are really checking you understand.

   Expect next

   • What happens to the price if rates rise 100 basis points?
   • How would you price it if the bond is callable?
   • Why is yield to maturity an imperfect discount rate?

   Reported by candidates at J.P. Morgan (Generalist, Columbus, 2026). Source: Wall Street Oasis.

4. 065Walk me through how you would actually build a DCF for a company you work at.Cost of capital and valuationIntermediatetechnicalCorporate financeKPO research support

   Say this

   Forecast unlevered free cash flow for five to ten years, discount it at WACC, add a terminal value, then bridge from enterprise value to equity value. The forecast is the work; the discounting is arithmetic.

   Then walk it

   1. Build revenue from drivers, then margins, then work down to EBIT. Tax the EBIT, add back depreciation, subtract capex and the change in working capital. That is unlevered free cash flow, and it excludes interest deliberately because financing sits in the rate.
   2. Pick an explicit forecast horizon long enough for the business to reach a steady state. For a mature FMCG company five years is fine. For an infrastructure asset with a 25-year concession you model the concession, not five years plus a perpetuity.
   3. Discount at WACC, using mid-year convention if cash flows arrive evenly, because year-end discounting understates value by roughly half a year of the discount rate.
   4. Terminal value by Gordon growth, with a growth rate no higher than long-run nominal GDP. For India that is a debate between roughly 4 and 6 percent, and you must cross-check the implied exit multiple. If your perpetuity implies 22 times EBITDA, the growth rate is wrong, not the market.
   5. Then the bridge: enterprise value less net debt, less minority interest, plus investments and surplus cash, less the value of anything not generating the cash flows you forecast. Divide by diluted shares.
   6. And I would state where the value actually comes from: typically 60 to 75 percent of a DCF is terminal value, which means the answer is mostly driven by two assumptions, WACC and terminal growth. So a single-point DCF is false precision, and I would present a sensitivity grid across both.

   Where candidates lose it

   Subtracting interest from the cash flows while discounting at WACC, and quoting a single-point value. Say the share of value in terminal value out loud, because acknowledging that the answer is an assumption-driven range is what separates an analyst from a spreadsheet operator.

   Expect next

   • What terminal growth rate would you use for India?
   • What would you cross-check the DCF against?
   • Which assumption is your value most sensitive to?
5. 067When would you value a business on a multiple rather than a DCF?Cost of capital and valuationIntermediatetechnicalValuationKPO research support

   Say this

   When you cannot forecast credibly, when you need a market-based answer rather than an intrinsic one, or when the decision is relative. Multiples are quick, market-anchored and comparable; a DCF is only as good as a ten-year forecast you are willing to defend.

   Then walk it

   1. The case for multiples: they reflect what buyers are actually paying today, they need far fewer assumptions, and for a stable business in a sector with good comparables they are usually within the DCF range anyway.
   2. So I would lead with multiples for an early-stage screen, a fairness cross-check, a cyclical business where the forecast is a guess, or a financial institution where free cash flow is not a meaningful concept and you use price to book and return on equity instead.
   3. I would lead with a DCF where the cash flow profile is unusual: a concession asset with a finite life, a company mid-turnaround whose current EBITDA is unrepresentative, or a business with a large investment phase before the returns arrive.
   4. The trap with multiples is the comparable set. Same sector is not the same business. A company at 14 times against peers at 10 may be correctly priced because it grows faster, earns a higher ROIC and carries less cyclicality. Multiples hide all of that in one number.
   5. You also have to match numerator to denominator. Enterprise value with EBITDA or EBIT, equity value with net income. And adjust for capital structure, leases, minority interests and one-offs before comparing anything.
   6. In India there is a practical reason multiples dominate: for an unlisted mid-market company you often have no reliable beta, no forecast beyond two years and no peer with clean disclosure. So the working answer is a multiple range from comparable transactions, with a DCF as a reasonableness check, and I would be honest that the range is wide.

   Where candidates lose it

   Framing it as a theoretical contest. Interviewers want the situational judgement: forecastability, the availability of clean comparables, and the type of business. Getting caught pairing equity value with EBITDA is the other fatal slip here.

   Expect next

   • Which multiple for a bank, and why not EV/EBITDA?
   • How would you adjust a comparable set for growth differences?
   • How do you value an unlisted Indian mid-market company?
6. 069Where are Indian policy rates right now, and what does that mean for the company you would be joining?Markets and ratesIntermediatetechnicalIndian corporate FP&ATreasury

   Say this

   Give the repo rate, the ten-year G-sec yield and the inflation print, then trace them to three things the company actually feels: borrowing cost, working capital cost and demand. The chain matters more than the decimal.

   Then walk it

   1. The three numbers to have ready: the RBI repo rate, the ten-year G-sec yield, and CPI inflation against the RBI's 4 percent target with a 2 percent band. Also know the stance, whether the committee is neutral, accommodative or withdrawing accommodation.
   2. First transmission: the cost of debt. Most Indian corporate borrowing is floating and benchmarked to an external benchmark or MCLR, so a 50 basis point repo move flows through within a quarter or two. On 500 crore of debt that is 2.5 crore of EBIT.
   3. Second: working capital. The cash credit line reprices immediately, so a rate move changes the cost of every day of receivables and inventory, which is the argument for treating working capital days as a financial KPI rather than an operational one.
   4. Third: demand. For anything financed at the point of sale, housing, autos, consumer durables, the rate is a demand variable, not just a cost variable. That effect is bigger than the interest line for those sectors.
   5. Fourth: the discount rate. A higher G-sec raises the risk-free rate, raises WACC, and lowers every NPV in the capex pipeline. Projects approved at a 11 percent hurdle do not automatically survive at 13.
   6. So the answer I would land on is a specific action: at the current level I would re-test the capex hurdle rate, look at fixing a portion of floating debt, and tighten the receivables target. That converts a macro answer into a finance decision, which is what the question is really asking for.

   Where candidates lose it

   Reciting the repo rate and stopping. Anyone can memorise a number. The answer is the transmission chain into borrowing cost, working capital cost, demand and the hurdle rate, ending in one decision you would take.

   Expect next

   • What is the ten-year G-sec yield today?
   • Would you fix or float the company's debt right now?
   • Which sector is most exposed to a 100 basis point move?
7. 071What challenges will this firm face in the current macroeconomic environment?Markets and ratesIntermediatetechnicalVanguardAsset Management · Malvern · 2023

   Say this

   Pick two or three challenges specific to their revenue model, not general macro headlines, and trace each one to a line in their P&L. Then say which one you would watch and what data point would tell you it is happening.

   Then walk it

   1. Start from how they earn money. An asset manager earns basis points on assets, so its revenue is a market-level bet: a drawdown cuts revenue directly while costs stay fixed, which is high operating leverage in the wrong direction.
   2. Then the structural pressure. For a large index manager the live issue is fee compression and flows into ever-cheaper products, so revenue can fall while assets rise. That is a far better answer than 'rates are volatile'.
   3. Then the cost side: technology and compliance spend that does not scale down, wage inflation in the roles they compete for, and any offshoring or GCC strategy that is already in flight.
   4. Then rates specifically, because it cuts both ways: higher yields make money market and fixed income products more attractive and bring inflows, while pressuring equity valuations and therefore equity-linked fee revenue. Naming both directions is what shows judgement.
   5. Then land it with a metric you would watch: net flows by asset class and revenue per unit of assets. Those two tell you whether the pressure is showing up before the earnings do.
   6. And the preparation point: this question is 90 percent research. Read their last annual report and the two most recent quarters, find the line management themselves flags as a risk, and have a view on it rather than a summary of it.

   Where candidates lose it

   Generic macro commentary about inflation and rates. The question is about this firm. Trace a specific challenge to a specific revenue or cost line, and name the metric you would track. Vagueness here reads as no preparation.

   Expect next

   • How would that show up in their reported numbers?
   • Which competitor is best placed and why?
   • What would you do about it if you were the CFO?

   Reported by candidates at Vanguard (Asset Management, Malvern, 2023). Source: Wall Street Oasis.

8. 073What makes a good financial model?Modelling, Excel and dataIntermediatetechnicalFinancial modellingCorporate FP&A

   Say this

   Someone else can pick it up, understand it in ten minutes and change an assumption without breaking it. That means one input layer, consistent formulas across each row, no hard-coded numbers inside calculations, and checks that fail loudly.

   Then walk it

   1. Structure first: inputs, calculations and outputs separated, ideally on separate sheets. One assumption lives in exactly one cell and is referenced everywhere else. If a tax rate appears in three places, the model is already wrong.
   2. Consistency across the row. The same formula copied right across every period, no exceptions, so you can audit a row by checking one cell. A single different formula mid-row is the most common source of silent error.
   3. Formatting as a communication tool: blue for inputs, black for formulas, green for links to other sheets, units labelled on every row, and signs consistent so costs are always negative or always positive, never both.
   4. Checks that are visible. Balance sheet balancing to zero, cash flow tying to the balance sheet cash movement, sources equalling uses, and a single master check cell at the top of every sheet that turns red. A check nobody can see is not a check.
   5. Simplicity. Two hundred rows that a director understands beats two thousand that only you do. If a level of detail does not change a decision, it is cost without benefit, and the honest test is whether removing it moves the answer by more than one percent.
   6. And documentation: a cover sheet with purpose, version, author, date, source of each key assumption and a list of known limitations. In an audit or a diligence process that page saves days.

   Where candidates lose it

   Answering with a list of Excel techniques. The interviewer is asking about design for other people: one input layer, row consistency, visible checks, and restraint on complexity. Mentioning the single master check cell signals you have actually built models in a team.

   Expect next

   • How would you document a model for handover?
   • What check would you build first?
   • When is complexity worth it?
9. 075Your three-statement model does not balance. How do you find the break?Modelling, Excel and dataIntermediatetechnicalFinancial modellingCorporate FP&A

   Say this

   Find the first period where the imbalance appears, then look at the size of the difference, because the number usually names the culprit. Most breaks are one of four things: net income not flowing to retained earnings, a balance sheet movement missing from the cash flow, a sign error, or dividends and capex mishandled.

   Then walk it

   1. Step one, locate. Check the balance row across all periods and find the first column that breaks. Everything after it is contamination; the error is in that one period.
   2. Step two, read the difference. If it equals net income, retained earnings is not picking up the P&L. If it equals twice something, you have a sign error. If it equals depreciation, the add-back is missing or double-counted. The magnitude is the diagnosis.
   3. Step three, check the two mandatory links: net income flows to retained earnings less dividends, and closing cash from the cash flow statement equals the balance sheet cash line. Those two account for most breaks.
   4. Step four, confirm every balance sheet line has a corresponding cash flow movement. A new line added to the balance sheet, a lease liability, a deferred tax balance, an FX reserve, and not wired into the cash flow, is the classic mid-project break.
   5. Step five, check the debt schedule and capex. Gross versus net movements in borrowings, and a capex figure taken from the P&L depreciation rather than the fixed asset schedule, both produce clean-looking models that do not balance.
   6. And the prevention, which is what I would say last: build the balance check from the very first day and keep it on screen. Models that balance from row one never accumulate a break you have to hunt for later.

   Where candidates lose it

   Hunting cell by cell from the top. Locate the first broken period, then let the size of the difference identify the cause. Not knowing that the difference often equals net income or depreciation is what makes this take an afternoon instead of five minutes.

   Expect next

   • The difference equals the depreciation charge. What is wrong?
   • Where would you put the balance check?
   • What if it balances but the cash flow does not tie?
10. 078Tell me about your Excel and Python skills. What do you use each for?Modelling, Excel and dataIntermediatetechnicalSSState StreetGlobal Data · Boston · 2024

    Say this

    Excel for anything a human has to read, review or change, which is most of finance. Python when the data is too big, too messy or too repetitive for Excel, so extracting and cleaning, reconciliations across large files, and anything I have to run every month.

    Then walk it

    1. Be specific about Excel level. Not 'advanced' but what you can do: three-statement models with circularity handled, driver-based revenue builds, power query transformations, pivot-based reporting packs, sensitivity tables and data validation.
    2. Then Python with named libraries and a real use. Pandas for joining and cleaning, openpyxl or xlsxwriter to write the formatted output back to Excel, requests for pulling from an API. The example is what counts: I built a script that reconciled a 400,000-row ledger extract against a bank statement and produced an exceptions file, which replaced two days of manual matching each month.
    3. Say where you draw the line, because that is the judgement they are testing. A model the CFO will change the assumptions in stays in Excel. A monthly data pull with 15 transformation steps goes into Python. Putting business logic in a script nobody else can read is a handover risk, not a win.
    4. Mention SQL if you have it, because in most GCC and shared service roles the data sits in a warehouse and being able to write your own query removes your dependence on a reporting team.
    5. Add the visualisation layer if it is real: Power BI or Tableau, and specifically whether you have built a data model with relationships rather than just charts.
    6. And be honest about the level. Claiming Python and then failing a simple list-comprehension question is far worse than saying you are comfortable with pandas and still learning object-oriented work.

    Where candidates lose it

    Saying 'advanced Excel and basic Python' with no evidence. Name the functions, name the libraries, and attach one before-and-after with a time saving. Overclaiming is fatal because these questions are usually followed by a live test.

    Expect next

    • What would you never do in Python that you would do in Excel?
    • Do you write SQL?
    • Walk me through the logic of your reconciliation script.

    Reported by candidates at State Street (Global Data, Boston, 2024). 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.