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. 006I give you two balance sheets and a P&L, but no cash flow statement. Build me the cash flow.Three statementsHardcase studyBig FourCorporate FP&A

   Say this

   I would build it indirect: start from net income, add back the non-cash charges I can see, then explain every balance sheet movement as either operating, investing or financing. Every line on the balance sheet has to be accounted for, and the check is that closing cash ties.

   Then walk it

   1. Take the difference in every balance sheet line, year on year. That list of deltas is the whole cash flow statement, just unsorted.
   2. Operating: net income, plus depreciation which I get from the movement in accumulated depreciation, plus other non-cash items, plus the change in receivables, inventory, payables and provisions. Assets up is a use of cash, liabilities up is a source.
   3. Investing: the change in gross fixed assets plus the depreciation charge gives me capex. Add any movement in investments or acquisitions.
   4. Financing: the change in borrowings, the change in share capital, and dividends paid which I back out of the retained earnings movement, opening retained earnings plus net income less closing retained earnings.
   5. Then the tie-out. The sum of the three sections must equal the change in the cash line. If it does not, I have missed a balance sheet movement, and the usual suspects are revaluation reserves, FX translation and a non-cash acquisition.
   6. On a real set of accounts I would also flag what the indirect method hides: it nets everything, so a company with big gross borrowings and repayments looks quiet. If I had the notes I would show gross.

   Where candidates lose it

   Trying to build it directly from receipts and payments. You do not have that data. Say the word 'indirect', anchor on retained earnings for dividends and accumulated depreciation for the charge, and narrate the tie-out at the end.

   Expect next

   • Where did the dividend number come from?
   • Your closing cash is off by 20. How do you find it?
   • Which balance sheet movements are not cash at all?
2. 014You have an hour with a set of accounts. What is your earnings quality checklist?Accounting policy and standardsHardcase studyRating agenciesBig Four

   Say this

   Six checks, in this order: cash conversion, receivable and inventory days, the gap between effective and cash tax, related-party transactions, auditor and policy changes, and the size of one-offs. Each one takes minutes and together they catch most of what goes wrong.

   Then walk it

   1. Cash conversion first. Cumulative operating cash flow divided by cumulative EBITDA over three to five years. Below about 70 percent on a mature business and I want an explanation.
   2. Then working capital in days, by line, over five years. Trends, not levels. Receivable days rising while revenue accelerates is the most common early warning in Indian mid-caps.
   3. Then tax. A persistent gap between the effective rate in the P&L and cash tax paid in the cash flow statement means profit is being recognised that the tax authority does not accept yet.
   4. Then related parties. Loans and advances to promoter entities, sales to group companies, royalty payments to the parent. This is where Indian governance failures concentrate, and the note is short enough to read fully.
   5. Then the housekeeping signals: auditor resignation or change, a qualification or emphasis of matter, a change in depreciation life or revenue policy, and any restatement.
   6. Then one-offs, and I would name the limitation in the same breath: add up 'exceptional' items over five years, because if they are exceptional every year they are operating costs with a friendlier label. None of this proves fraud either. It produces a list of questions for management, and the answers are the analysis.

   Where candidates lose it

   Reeling off ratios with no thresholds and no order. A checklist is only useful if you can say what number triggers concern and which check you run first. Cash conversion below 70 percent and rising receivable days are the two that earn their place.

   Expect next

   • Which of those six is the strongest single signal?
   • Walk me through a related-party note you would worry about.
   • How would you handle a company whose auditor just resigned?
3. 017Revenue is 1,200 crore and receivable days go from 60 to 75. How much cash does that cost, and what do you do about it?Working capital and cashIntermediatetechnicalCorporate FP&ATreasury

   Say this

   Roughly 49 crore. Daily revenue is 1,200 divided by 365, about 3.3 crore, times 15 extra days. At a 9 percent borrowing cost that is about 4.4 crore a year of interest for nothing.

   Then walk it

   1. The arithmetic out loud: 1,200 over 365 is 3.29 crore a day. Fifteen days is 49 crore of additional receivables, funded on the working capital line.
   2. Convert it into something a business head cares about. At 9 percent that is 4.4 crore of interest, and on a 10 percent net margin that is equivalent to losing 44 crore of revenue.
   3. Then find out where it is. Split by customer, by geography and by ageing bucket before proposing anything. A single large customer moving to 120-day terms is a different problem from a general slide.
   4. The levers, in order of how quickly they work: stop shipping to accounts beyond terms, tie a part of sales incentive to collection rather than booking, invoice on despatch rather than in a monthly batch, and offer a small early-payment discount where the maths works.
   5. Then the honest trade-off, which is the part that earns the answer: tightening terms can cost volume. So I would model the revenue you are prepared to lose against the 4.4 crore you save, and take that to the sales head as a choice, not an instruction.
   6. And I would put days of receivables on the monthly pack as a standing KPI with an owner, because what gets reported gets managed.

   Where candidates lose it

   Giving the rupee number and stopping. The interviewer wants to see you convert cash into interest cost, then into a business conversation. Also do not propose tightening credit without acknowledging the revenue it can cost.

   Expect next

   • What if the increase is all one customer who is 30 percent of sales?
   • Would you factor the receivables?
   • How would you incentivise the sales team on collections?
4. 019Inventory days jumped from 45 to 70 in one quarter. Diagnose it.Working capital and cashIntermediatecase studyCorporate FP&ABusiness finance

   Say this

   I would split it three ways before saying anything: is it raw material, work in progress or finished goods, is it volume or valuation, and is it demand or supply. Those three cuts almost always identify the cause in an afternoon.

   Then walk it

   1. First the composition. Raw material building is usually a procurement or supply decision. Work in progress building points to a production bottleneck. Finished goods building means you made what you could not sell, and that is the worst of the three.
   2. Then volume versus price. Inventory in rupees can rise because steel prices rose 30 percent with no change in tonnage. Always ask for quantities, because the rupee number alone will mislead you.
   3. Then the denominator. Inventory days uses cost of goods sold, so a sales collapse raises days with no change in stock at all. Check whether the numerator or the denominator moved.
   4. Then the benign explanations: a deliberate pre-buy ahead of a price increase, stocking for a festive season, a new product launch, or a shift to a longer-lead-time import source.
   5. Then the consequences if it is finished goods. Obsolescence and provisioning risk, discounting that damages next quarter's margin, and a cash cost. Twenty-five days on 800 crore of cost of sales is about 55 crore.
   6. My deliverable would be an inventory ageing and slow-moving report by SKU with an owner per category, because the fix is operational and finance's job is to make the cost visible.

   Where candidates lose it

   Jumping straight to 'demand fell'. Half the time it is a price effect or a denominator effect. Ask for quantities and check whether cost of goods sold moved before you diagnose demand.

   Expect next

   • It is all finished goods. What now?
   • How would you set an inventory provisioning policy?
   • What would you put in the monthly pack to stop this recurring?
5. 021A supplier offers 2 percent off if you pay in 10 days instead of 30. Do you take it?Working capital and cashIntermediatetechnicalCorporate FP&ATreasury

   Say this

   Yes, if you have the cash. Two percent for 20 days is about 37 percent annualised, which is far above any borrowing cost you have. The only reasons to decline are liquidity or a covenant constraint.

   Then walk it

   1. The arithmetic: you are paying 98 to settle 100, so the return is 2 over 98, about 2.04 percent for 20 days. There are roughly 18.25 such periods in a year, so annualised it is about 37 percent simple and higher compounded.
   2. Compare that with your marginal cost of funds. Even at a 10 percent working capital line, borrowing to take the discount earns you about 27 points of spread. It is one of the cleanest arbitrages in corporate finance.
   3. So the decision is never about the rate, it is about liquidity. If drawing the cash breaks a covenant, strands you before a large payroll, or uses headroom you need for a tax payment, you decline on treasury grounds and say so.
   4. Check the fine print too. Some discounts are settled as credit notes months later, which destroys the return, and some suppliers quietly raise list price to fund the discount.
   5. Also think about who else wants that cash. If the alternative use is funding receivables at a customer paying 37 percent-equivalent terms, you compare returns rather than assume the discount wins.
   6. And the reverse question is worth flagging: if your own customers ask you for a 2 percent discount for early payment, you are the one paying 37 percent, and the answer is usually no.

   Where candidates lose it

   Answering 'yes, 2 percent is cheap'. The number that makes the case is the annualised 37 percent, and the only competent refusal is a liquidity one. Skip the annualisation and you have shown no analysis.

   Expect next

   • What if your working capital line is fully drawn?
   • Your customer asks you for the same deal. What do you say?
   • How would you rank this against paying down debt?
6. 029Two companies both report 18 percent ROE. Which one would you rather own, and what would you ask to decide?Ratio analysisIntermediatetechnicalCorporate financeKPO research support

   Say this

   I would decompose both. The one that gets to 18 percent on operating performance with modest leverage is worth more than the one that gets there with debt, because the first is repeatable and the second is amplified.

   Then walk it

   1. First cut, DuPont. Company A: 14 percent net margin, 0.9 times asset turnover, 1.4 times equity multiplier. Company B: 3 percent margin, 2.0 times turnover, 3.0 times multiplier. Both land at roughly 18. Only one survives a bad year.
   2. Second cut, ROCE and ROIC, because that removes the leverage effect. If A earns 20 percent ROCE and B earns 8, the question is over.
   3. Third cut, cash. Operating cash flow over EBITDA for both. An 18 percent ROE that never converts to cash is an accrual, not a return.
   4. Fourth, sustainability. Reinvestment rate and the growth runway. A 25 percent ROIC business that can only reinvest 20 percent of earnings is worth less than a 19 percent ROIC business that can reinvest all of it.
   5. Fifth, the denominators. Has either shrunk equity through buybacks or write-offs? An 18 percent ROE on an equity base halved by impairment is not a performance.
   6. So the questions I would ask: what is ROCE, what is net debt to EBITDA, what is the cash conversion, and how much of earnings can be reinvested at that rate. Those four settle it.

   Where candidates lose it

   Picking one before decomposing. There is no answer from ROE alone, and the interviewer is testing whether you know that. Give the two contrasting DuPont profiles with numbers, then name the four questions.

   Expect next

   • What if the leveraged one is in a regulated utility?
   • How much would you pay for each?
   • Which would a lender prefer?
7. 030You are handed a business you know nothing about and asked for a revenue forecast by Friday. How do you build it?Forecasting and budgetingIntermediatetechnicalCorporate FP&ABig Four

   Say this

   Break revenue into a price times volume build, find the two or three drivers that actually move it, then sanity-check the result top down against the market. Never forecast a revenue growth percentage directly, because then you cannot explain or defend it.

   Then walk it

   1. Start with the disaggregation the business already uses: by product, by channel, by geography, by customer cohort. Whatever the sales team reports on weekly is the right unit, because that is the data that will exist.
   2. Build price and volume separately. Volume might be stores times transactions times basket, or installed base times renewal rate, or capacity times utilisation. Price is realisation per unit, and separating it lets you answer 'is growth price or volume', which is the first question anyone asks.
   3. Find the drivers by looking at what correlated historically. Two or three drivers explain most businesses. Anything beyond five is false precision.
   4. Then the top-down check. Market size times your share, or industry growth plus or minus a share change. If your bottom-up build implies share going from 9 percent to 14 in two years, you have found your error.
   5. Then triangulate against three anchors: the order book or pipeline, management guidance, and the run rate implied by the last two quarters annualised.
   6. And I would deliver it as three cases with named assumptions rather than a single number, and flag explicitly which one assumption the whole forecast turns on. By Friday the honest output is a defensible structure, not a precise answer.

   Where candidates lose it

   Forecasting a growth percentage off last year. It is fast and it is indefensible, because you cannot tell the business head what would have to be true for it to happen. Build price times volume, then check top down.

   Expect next

   • What if there is no historical data at all?
   • How would you handle a brand-new product line?
   • Which single assumption would you stress first?
8. 032How do you verify the validity of a client's pipeline to forecast revenue?Forecasting and budgetingHardcase studyHWHarris WilliamsInvestment Banking · Richmond · 2025

   Say this

   Test it against history rather than accepting the weightings. Take the pipeline as it stood 12 months ago, see what actually converted by stage, and apply those realised rates instead of management's. The gap between the two is your adjustment.

   Then walk it

   1. First, back-test. Pull the pipeline snapshot from four quarters ago, match it to closed business, and compute conversion by stage, by deal size and by sales rep. If stage-four deals converted at 45 percent while the model assumes 80, you have your answer.
   2. Second, check ageing. Deals that have sat in the same stage for three quarters are not pipeline, they are hope. I would strip or heavily discount anything past a normal cycle length.
   3. Third, look for hygiene problems: duplicate opportunities, deals with no close date or a close date that has been pushed four times, values entered as round numbers, and a bulge in the final quarter that mirrors the sales incentive calendar.
   4. Fourth, corroborate outside the CRM. Signed letters of intent, purchase orders, customer references, and for a diligence exercise, calls with two or three named prospects. Revenue that cannot be corroborated gets a haircut.
   5. Fifth, check coverage. Pipeline value over the target. Three times coverage on a 33 percent historical win rate is consistent; three times coverage on a 15 percent win rate is a miss waiting to happen.
   6. Then I would present it as a range: management case, back-tested case, and a downside using bottom-quartile conversion, with the bridge between them explained in one slide. The bridge is the deliverable, not the number.

   Where candidates lose it

   Accepting management's probability weightings and multiplying. Every CRM is optimistic near quarter end. The work is back-testing realised conversion by stage and stripping stale deals, and saying that is what gets you hired.

   Expect next

   • The sales head says your haircut is insulting. How do you handle it?
   • What if the CRM data only goes back two quarters?
   • How would this change for a business with three large customers?

   Reported by candidates at Harris Williams (Investment Banking, Richmond, 2025). Source: Wall Street Oasis.

9. 033What should a makeup company think about regarding revenue?Forecasting and budgetingIntermediatetechnicalBain CapitalGeneralist · Boston · 2023

   Say this

   Volume times price times mix, but for cosmetics the three things that decide it are channel, repeat rate and trend risk. It is a business where a single viral product can double revenue and then vanish, so the question is how much of revenue is repeatable.

   Then walk it

   1. Build the revenue as units times realisation per unit, split by channel, because channel economics differ wildly. Modern trade, general trade, e-commerce marketplace and own direct-to-consumer site carry very different gross-to-net and different receivable days.
   2. Then gross to net, which is where cosmetics revenue really lives: list price less trade schemes, retailer margin, promotional discount, influencer and marketplace commission, and returns. Reported revenue can be 25 to 35 percent below list.
   3. Then repeat versus new. A colour cosmetic is trend-driven and often a one-time purchase; a skincare or base product repeats. Two brands with the same revenue and different repeat rates are worth very different multiples.
   4. Then SKU concentration and shelf life. If the top three SKUs are half of sales, one formulation problem or one competitor launch is a revenue event. Inventory carries expiry risk, so aggressive channel loading creates returns later.
   5. For India specifically: sachet and small-pack price points drive penetration, GST slab and regulatory labelling change cost to serve, and quick-commerce has compressed the path to repeat purchase.
   6. So the summary I would give: forecast it by channel with an explicit gross-to-net, hold the repeat rate as the key assumption, and stress the top three SKUs. That is where the volatility is.

   Where candidates lose it

   Answering generically about consumer demand. The interviewer wants category-specific thinking: gross to net, channel mix, repeat rate and SKU concentration. Also do not forget returns, which are a real revenue line in beauty.

   Expect next

   • How would you model a viral product launch?
   • Which is a better business, colour cosmetics or skincare?
   • What does quick commerce do to the working capital cycle?

   Reported by candidates at Bain Capital (Generalist, Boston, 2023). Source: Wall Street Oasis.

10. 037Your forecast has missed by more than 10 percent three quarters running. What do you do?Forecasting and budgetingHardcase studyCorporate FP&ABusiness finance

    Say this

    Decompose the misses before changing anything. If the errors are all in one direction it is bias and the fix is process and incentives. If they are scattered it is variance and the fix is the model and the driver set. You cannot treat bias and variance the same way.

    Then walk it

    1. First, measure properly. Forecast error by line, by business unit, by owner, over eight quarters, with the sign preserved. Mean error tells you bias; mean absolute error tells you precision. Most organisations only track the second and then wonder why nothing improves.
    2. Second, separate the miss into volume, price, mix and timing. Three quarters of missing on timing is a completely different problem from missing on price, and the conversation goes to different people.
    3. Third, look at who submits the numbers and what happens to them when they are wrong. If sandbagging is rewarded and optimism is punished, you have designed the bias in, and no amount of model work will fix it.
    4. Fourth, fix the drivers. If revenue is forecast off a pipeline whose conversion assumption has never been back-tested, that is the error source. Replace judgement with realised rates wherever history exists.
    5. Fifth, change the output format. Move from a single number to a range with a named central case, and publish the forecast-versus-actual scorecard monthly with owners' names on it. Visibility corrects bias faster than any methodology change.
    6. The realistic expectation I would set: getting mean absolute error from 12 percent to 5 is a two- or three-quarter programme, not a month, and some businesses are genuinely unforecastable at that precision. Saying so is more credible than promising accuracy.

    Where candidates lose it

    Going straight to 'build a better model'. The most common cause is incentive-driven bias, not model error, and the diagnostic that separates them is whether the errors share a sign. Lead with that.

    Expect next

    • How would you present the bias finding to the business head who caused it?
    • What accuracy is realistic for a project business?
    • Would you change anyone's incentives?

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.