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. 012What does a deferred tax asset actually represent, and when would you write it off?Accounting policy and standardsHardtechnicalBig FourCorporate FP&A

   Say this

   It is a future tax saving you have already recognised in the accounts. It arises when you have paid tax on income you have not yet booked, or booked an expense the tax authority has not yet allowed. You write it down when you can no longer show it is probable you will have taxable profit to use it against.

   Then walk it

   1. The two sources: timing differences, like a provision disallowed until it is paid, and carried-forward losses that you expect to set against future profit.
   2. The recognition test is the whole question. Under Ind AS 12 you recognise a DTA only to the extent that future taxable profit is probable. On a loss-making company that is a forecast, and forecasts are optimistic.
   3. So a large DTA on a company with three years of losses is a soft asset. It converts to value only if the turnaround happens, and it is exactly the asset that gets written off when the turnaround does not.
   4. A number helps: if a company carries 300 crore of DTA and the tax rate is 25 percent, management is implicitly telling you it expects 1,200 crore of taxable profit within the loss carry-forward window. Ask whether that is credible.
   5. For credit work I would strip DTA out of net worth. It cannot be sold, pledged or used to pay a lender, and a write-off hits equity exactly when the company can least afford it.
   6. Deferred tax also explains the gap between effective tax rate and cash tax rate, which is a useful cross-check on earnings quality.

   Where candidates lose it

   Describing the accounting entry and never addressing recoverability. The interesting part is that a DTA is a capitalised forecast. If you do not say it depends on future taxable profits being probable, you have described the bookkeeping and missed the analysis.

   Expect next

   • How would you treat DTA in a net worth covenant?
   • Why do effective and cash tax rates differ?
   • What would make you doubt a DTA on an Indian infrastructure company?
2. 013Give me three practical differences between Ind AS, IFRS and US GAAP that would actually change your numbers.Accounting policy and standardsHardtechnicalBig FourGCC finance centres

   Say this

   Inventory costing, development cost capitalisation and impairment reversals. Ind AS is converged with IFRS, so the real gap is IFRS versus US GAAP, and those three change reported profit and asset values in ways that matter.

   Then walk it

   1. Inventory: US GAAP permits LIFO, IFRS and Ind AS do not. In an inflationary year LIFO reports lower profit and lower inventory, so a US company and an Indian company with identical operations show different margins.
   2. Development costs: IFRS and Ind AS require capitalisation once the criteria are met, US GAAP expenses most research and development as incurred except for specific software rules. That is a direct EBITDA and asset difference for any product company.
   3. Impairment: IFRS and Ind AS allow reversal of a previous impairment if the asset recovers, except for goodwill. US GAAP prohibits reversal. So the same recovery shows up as profit in one framework and nowhere in the other.
   4. Two more worth knowing for an Indian seat: Ind AS carries a few carve-outs from IFRS, for example the treatment of foreign currency monetary item translation differences, so 'converged' is not 'identical'. And Ind AS 115 revenue is essentially IFRS 15, which matters for how Indian IT and construction companies phase revenue.
   5. Practically, in a GCC or KPO seat you often restate an entity from local GAAP to the group's framework. So the useful skill is knowing which three or four adjustments explain most of the gap, not memorising the whole standard.
   6. And the presentation differences trip people up: IFRS allows interest paid in operating or financing, US GAAP fixes it in operating, so the same company has two different operating cash flows.

   Where candidates lose it

   Saying 'Ind AS is the same as IFRS'. It is converged, not identical, and there are named carve-outs. Also, generic answers about 'principles versus rules' score nothing. Name specific standards and say which direction profit moves.

   Expect next

   • How would LIFO versus FIFO change a steel company's margins this year?
   • What is a carve-out you know of in Ind AS?
   • Why does interest classification in cash flow matter for a covenant?

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.