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. 004A company is reporting record profits but its bank balance is falling. Talk me through what you would check.Three statementsIntermediatetechnicalCorporate FP&ARating agencies

   Say this

   I would go straight to the operating cash flow line and compare it with EBITDA. Nine times out of ten the answer is working capital, and the usual culprit is receivables growing faster than revenue.

   Then walk it

   1. First test: EBITDA versus cash from operations. If EBITDA is 200 crore and operating cash flow is 40, the gap is the whole question.
   2. Then decompose the working capital lines as days, not rupees. Receivable days up from 55 to 85 on 20 percent revenue growth means you are funding your customers' balance sheets.
   3. Then check whether the revenue is real. Aggressive percentage-of-completion, channel stuffing near quarter end, or revenue booked on a distributor who has not sold through all show up as receivables that age.
   4. Then look below operating cash flow. Heavy capex, an acquisition, or debt repayment can drain cash while the P&L is fine. That is not an earnings problem, it is a funding problem, and the fix is different.
   5. Finally check the interest and tax lines for cash versus accrual differences, and check whether inventory is building because demand slowed.
   6. The one-line conclusion I would give a CFO: profit is an opinion, cash is a fact, and the bridge between them is days of working capital.

   Where candidates lose it

   Listing every possible cause in no order. Interviewers want a sequence. EBITDA to operating cash flow first, then working capital in days, then revenue recognition, then below-the-line uses. Sequence is the skill being tested.

   Expect next

   • Which working capital line would you fix first and why?
   • How would you spot channel stuffing from published accounts?
   • What would you say to the sales head whose receivables caused it?
2. 005Walk me from EBITDA to free cash flow.Three statementsIntermediatetechnicalCorporate FP&ACorporate finance

   Say this

   EBITDA less cash taxes, less the change in working capital, less capex gives you unlevered free cash flow. Take interest out after that and you have free cash flow to equity.

   Then walk it

   1. Start with EBITDA as a proxy for cash operating profit, then remember it is only a proxy. It ignores tax, working capital and the cost of keeping the assets running.
   2. Tax: the clean way is to tax EBIT, not EBITDA, so you give yourself the depreciation shield. EBIT times one minus the tax rate, then add depreciation back.
   3. Working capital: a growing business consumes cash here. If revenue grows 100 crore and you hold 60 days of net working capital, that is roughly 16 crore of cash gone before you earn a rupee of it.
   4. Capex: split maintenance from growth if you can. Maintenance capex is a genuine cost of staying in business, growth capex is discretionary, and treating them as one number is how people misjudge cash generation.
   5. Unlevered free cash flow is what the business produces for everyone who funded it. Subtract net interest and mandatory debt repayment and you get what is left for equity.
   6. The limitation worth saying out loud: EBITDA is the most abused metric in finance precisely because it sits above all three of those deductions. For a capital-heavy business it flatters everything.

   Where candidates lose it

   Taxing EBITDA instead of EBIT. It overstates the tax bill and understates cash by ignoring the depreciation shield. Also, stating the formula with no number attached makes it sound memorised. Put one figure on the working capital step.

   Expect next

   • Why unlevered rather than levered free cash flow for a valuation?
   • How would you split maintenance from growth capex from published accounts?
   • For which type of business is EBITDA most misleading?
3. 007What is the quality of the revenue? How would you actually judge that for a company you cover?Three statementsIntermediatetechnicalMoody'sCorporate Finance · New York · 2018

   Say this

   Revenue quality is about repeatability, cash conversion and concentration. I would ask three things: does it come back next year without being re-sold, does it turn into cash, and how much of it comes from the top five customers.

   Then walk it

   1. Repeatability first. Contracted or subscription revenue with a renewal rate is worth far more than project revenue re-won every year. For an IT services firm I would look at the share of annuity business versus time-and-material.
   2. Cash conversion. Revenue that sits in receivables for 90 days, or in unbilled revenue for longer, is lower quality than revenue collected in 30. Unbilled revenue growing faster than revenue is a classic warning.
   3. Concentration. If the largest customer is 25 percent of sales, the revenue carries a step-change risk that the growth rate will not show you.
   4. Then pricing versus volume. Growth from price with stable volume tells you there is real pricing power. Growth from discounting into a channel is borrowed from next year.
   5. And the accounting itself. Percentage of completion, gross versus net presentation for a platform, incentives and rebates netted or not, and whether anything material was recognised in the last week of the quarter.
   6. For a rating I would summarise it as: how much of this revenue would still be there next year if nobody made a sales call. That is the number that supports the debt.

   Where candidates lose it

   Treating this as a revenue recognition question only. Quality is commercial before it is accounting. Repeatability, cash conversion and customer concentration are the three levers, and naming concentration is what makes you sound like a credit analyst.

   Expect next

   • How are margins and operating leverage at that company?
   • What would you ask the CFO to prove revenue quality?
   • Which sector has the lowest quality revenue, in your view?

   Reported by candidates at Moody's (Corporate Finance, New York, 2018). Source: Wall Street Oasis.

4. 008What does deferred revenue tell you about a business, and how do you treat it in a forecast?Three statementsIntermediatetechnicalCorporate FP&ATechnology sector finance

   Say this

   It is cash collected before delivery, so it sits as a liability, not revenue. Growing deferred revenue is one of the best leading indicators you get in published accounts, because it is revenue already banked but not yet recognised.

   Then walk it

   1. Mechanically: cash up, deferred revenue up, nothing on the P&L. As you deliver, the liability unwinds into revenue and the cash flow shows a working capital outflow even though the business is fine.
   2. For forecasting, deferred revenue plus the contracted order book gives you visibility. If a SaaS company has 400 crore of deferred revenue and guides to 900 of revenue, nearly half of next year is already sold.
   3. The direction matters more than the level. Deferred revenue falling while revenue rises means you are recognising a backlog you are not replacing. That is a deceleration you can see two quarters early.
   4. It also funds the business for free. A company with large customer advances is being financed by its customers, which is why negative working capital and deferred revenue usually travel together.
   5. The caveats: it is sensitive to billing frequency, so a shift from annual to monthly invoicing collapses deferred revenue with no change in the business. And multi-year contracts split into current and non-current, so read both.
   6. So I would use it as a cross-check on management guidance, never as the forecast itself.

   Where candidates lose it

   Calling it revenue. It is a liability, and saying otherwise ends the conversation. The other miss is ignoring billing-frequency changes, which is the single most common false signal in deferred revenue analysis.

   Expect next

   • Would you rather own a business with rising or falling deferred revenue?
   • How does deferred revenue behave in a cash flow forecast?
   • What is the difference between deferred revenue and unbilled revenue?

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.