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. 015What is the cash conversion cycle, and what does a long one tell you?Working capital and cashCorephone / first roundCorporate FP&ATreasury

   Say this

   Inventory days plus receivable days minus payable days. It is the number of days between paying for something and being paid for it, and every one of those days has to be funded by debt or equity.

   Then walk it

   1. Inventory days is inventory divided by cost of goods sold times 365. Receivable days uses revenue, payable days uses purchases or cost of goods sold. Use the same basis consistently, because mixing revenue and COGS bases is the most common error.
   2. A worked case: 60 days inventory, 70 days receivables, 40 days payables gives a 90-day cycle. On 1,000 crore of revenue at 20 percent margin, roughly 90 days of cost is about 200 crore of cash permanently tied up.
   3. A long cycle is not automatically bad. A pharma company holding raw material because of regulatory batch testing is different from one holding it because demand fell.
   4. The useful version is the trend and the peer comparison. Ninety days against a peer group at 55 is a competitive disadvantage in funding cost, which is worth real basis points of return on capital.
   5. Negative cycles exist and they are wonderful. A quick-service restaurant or an e-commerce marketplace collects at the till and pays suppliers in 45 days, so growth funds itself.
   6. The limitation: it is built on year-end balances, which for a seasonal business are the least representative day of the year. Use averages or quarterly data where you can.

   Where candidates lose it

   Getting the sign on payables wrong, or mixing bases by using revenue for inventory days. Also, quoting the cycle without converting it into rupees of funding. The number only means something when you say what it costs to carry.

   Expect next

   • Which is worse, receivable days up 10 or payable days down 10?
   • How would you shorten the cycle without damaging sales?
   • Which Indian sectors run negative working capital?
2. 016Receivable days went up 10 and payable days came down 10. Which worries you more?Working capital and cashIntermediatetechnicalCorporate FP&ATreasury

   Say this

   They cost the same cash, but receivable days worry me more because that signal comes from your customers, and it usually means either credit quality is deteriorating or you bought revenue with terms. Payable days falling is more often a self-inflicted or supplier-driven choice.

   Then walk it

   1. On the arithmetic they are close to identical. Ten days of cost of sales out of the business either way, so the cash impact does not decide it.
   2. Receivables rising tells you something about demand. Either customers cannot pay, or the sales team extended terms to close the quarter. Both mean the reported revenue is lower quality than it looks.
   3. The test is ageing. If the increase sits in the over-90-day bucket, that is a collection and credit problem heading for a write-off. If it is spread evenly, it is more likely a terms change.
   4. Payables falling has three benign explanations: you took an early-payment discount, you switched to a supplier with tighter terms, or you lost your own credit standing with suppliers. The third one is the dangerous version, and it is a real distress signal.
   5. So my order of investigation is ageing first, then the discount and supplier-terms question, then whether the supplier is demanding advances because of concern about you.
   6. Practically, in an Indian mid-cap I would also check whether receivables sit with government or PSU customers, where 120 days is normal and not a quality signal at all.

   Where candidates lose it

   Treating this as an arithmetic question. The cash effect is the same; the question is about what each movement signals. Say 'receivables, because that signal comes from outside the company', then give the ageing test.

   Expect next

   • How would you read the receivables ageing note?
   • What would make falling payable days a distress signal?
   • How do you handle PSU receivables in a forecast?
3. 018Is negative working capital a good thing or a bad thing?Working capital and cashIntermediatetechnicalCorporate FP&ARating agencies

   Say this

   Usually good, and occasionally the first sign of distress. It means suppliers and customers are funding your operations, so growth generates cash instead of consuming it. It turns bad when it is caused by stretching payables you cannot pay.

   Then walk it

   1. The healthy version: a food retailer or a QSR collects cash at the counter and pays suppliers in 45 days. Grow the store count and cash comes in ahead of the cost. Same for a marketplace holding customer advances.
   2. Why it is valuable: every rupee of growth is self-funded, so return on capital employed is structurally high and the business needs almost no external working capital line.
   3. The distress version looks identical in the ratio. A company that has run out of cash also has payables ballooning, but because it cannot pay them. The difference is whether payables are stretched by contract or by default.
   4. So the test is the quality of the payables. Are terms contractual and consistent, is there an ageing problem, are suppliers demanding advances or letters of credit, and is there a spike in the last month of the year?
   5. The second risk is fragility. A negative working capital business unwinds violently if volumes fall. Sales drop, you stop buying, payables collapse and you have to fund the unwind in cash. That is how a good model kills a company in one bad quarter.
   6. So I would say: excellent while growing, dangerous while shrinking, and always check whether the payables are chosen or forced.

   Where candidates lose it

   Answering 'good' and stopping. The interesting half is the unwind risk when volumes fall and the fact that distress produces the same ratio. Saying both is what makes the answer sound like experience rather than a textbook.

   Expect next

   • How would you distinguish stretched payables from negotiated terms?
   • What happens to that business in a 20 percent volume decline?
   • Which Indian sectors run this model?
4. 020How does GST affect a company's cash flow?Working capital and cashHardtechnicalIndian corporate FP&ATreasury

   Say this

   GST is P&L neutral for a registered business but it is not cash neutral. You pay output GST to the government by the 20th of the following month, and you recover input credit only when your supplier has actually filed. That mismatch parks real cash with the government.

   Then walk it

   1. The mechanics: you collect GST on sales, claim credit on purchases, and pay the difference monthly. Because it is a pass-through, it never touches revenue or cost in the P&L.
   2. The first cash drag is timing. You remit output GST on invoices raised, whether or not the customer has paid you. So on 60-day receivables you are funding the government's tax for roughly a month and a half.
   3. The second is input credit matching. Credit flows only when the supplier's return reflects the invoice. A non-compliant vendor means your credit sits blocked, which is why vendor compliance is now a treasury issue, not just a tax one.
   4. The third is accumulated credit. Exporters and companies with an inverted duty structure build unutilised credit balances and depend on refunds, which take time. For an exporter that balance can be a serious chunk of working capital.
   5. So in a cash forecast I model GST as its own line: output payable, input credit available, net remittance by the 20th, and a separate refund-receivable line with a realistic collection lag. Never net it into revenue.
   6. The practical FP&A action is a monthly reconciliation of GST recoverable in the ledger against the portal, because differences are how companies discover blocked credit six months late.

   Where candidates lose it

   Saying GST has no cash impact because it is a pass-through. Pass-through in the P&L, not in cash. The output-before-collection timing and blocked input credit are the two effects an interviewer is listening for.

   Expect next

   • How would you model GST in a 13-week cash flow?
   • What is an inverted duty structure and who suffers from it?
   • How does finance make vendors comply?

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.