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Top Financial
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A financial analyst
Mid-Level
researches macroeconomic and microeconomic conditions along with company fundamentals
to make business, sector and industry recommendations and can recommend a course of action, such as to buy or
(Exp:stock
sell a company’s 3 to 8based
years)
upon its overall current and predicted strength.

Though thereSenior-Level
are a lot of opportunities for financial analysts in the industry, the chances of getting into one of the
top financial companies can be boosted if you are a Chartered Financial Analyst (CFA). Naukri Learning
(Exp:array
provides a wide 8 years and above)
of financial analyst certification courses to help you in that direction. You can also gain
advanced professional financial knowledge and skills through these courses.
Cover Letter SamplesNEW
Outlined below are the answers to some of the most frequently asked Financial Analyst interview questions for
View
the position of Cover Letter
a financial samples
analyst:
Recruiter Reach
Resume Display

Q1. Explain ‘financial

Gain more modelling’.
visibility among recruiters

RecruiterConnectionNEW

Find
Ans. Financial and contact
modelling is arecruiters hiring
quantitative in yourcommonly
analysis domain used for either asset pricing or general corporate
finance.
Priority ApplicantNEW

Increase your chance of getting a call

Q2. Learning
Walk me through a ‘cash flow statement.’
Information Technology
eCommerce
Office Tools
Ans. You’ll have to Big
beData & CloudHOT
well-prepared for this question. Start with the net income and go line by line explaining
all major adjustmentsNetworking
to arrive at cash flow from operating activities. Mention all the necessary parts that are
associated with it. Testing
App DevelopmentNEW
Operations
Prince2
Six SigmaHOT
Q3. Is it possible for a company to have positive cash flow but still be
Project Management
in serious financial Agile & Scrum trouble?
Supply Chain
Finance & Banking
IFRSHOT
Ans. Yes. There are CFANEW
two examples –
Corporate Finance
Investment Banking
(i) a company that Accounting
is selling off inventory but delaying payables will show positive cash flow for a while even
though it is in trouble.
Compliance
(ii) A company hasand
Sales strong revenues for the period but future forecasts show that revenues will decline.
Marketing
Sales
Retail
Advertising
Q4. What doDigital youMarketing
think is the best evaluation metric for analysing a
Human Resources
company’s stock? Payroll
HR Management
Recruitment
Ans. There is no specific
HR Training
metric. It depends on how you put the answer and make the interviewers understand
value of the specific
Compensation
metric that you mention.
Find Jobs
Jobs on Mail and SMS

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Q5. What is ‘working capital’?
Value Packs
Help
FAQ
Ans. Working capital
Career is the best defined as current assets minus current liabilities.
Advice
Learning Advice
Contact Us

Q6. Explain quarterly forecasting and expense models?

Ans. The analysis of expenses and revenue which is predicted to be produced or incurred in future is called
quarterly forecasting.

An expense model tells what expense categories are allowed on a particular type of work order.

Q7. What is the difference between a journal and a ledger?

Ans. The journal is a book where all the financial transactions are recorded for the first time. The ledger is one
which has particular accounts taken from the original journal.

Also Read>> Career Opportunities in IFRS

Q8. Mention one difference between a P&L statement and a balance

sheet?

Ans. The balance sheet summarises the financial position of a company for a specific point in time. The P&L
(profit and loss) statement shows revenues and expenses during a set period of time.

Q9. What is ‘cost accountancy’?

Ans. Cost accountancy is the application of costing and cost accounting principles, methods and techniques to
the science, art and practice of cost control and the ascertainment of profitability as well as the presentation of
information for the purpose of managerial decision making.

Q10. What is NPV? Where is it used?

Ans. Net Present Value (NPV) is the difference between the present value of cash inflows and the present value
of cash outflows. NPV is used in capital budgeting to analyse the profitability of a projected investment or
project.

Q11. How many financial statements are there? Name them

Also Read>> How Finance Learning can be Made More Interesting

Ans. There are four main financial statements – 1) balance sheets, 2) income statements, 3) cash flow statements,
and 4) statements of shareholders’ equity.

Q12. What are ‘adjustment entries’?

Ans. Adjustment entries are accounting journal entries that convert a company’s accounting records to the
accrual basis of accounting.

Q13. Do you follow the stock market? Which stocks in particular?

Ans. You need to be very careful in answering this question. As a financial analyst, following the stock market
proves to be beneficial. Also, always be up-to-date with the stocks.

Also Read>> Career Paths you could explore with an IFRS certification!
Q15. What is a ‘composite cost of capital’?

Ans. Also known as the weighted average cost of capital (WACC), a composite cost of capital is a company’s
cost to borrow money given the proportional amounts of each type of debt and equity a company has taken on.

WACC= Wd (cost of debt) + Ws (cost of stock/RE) + Wp (cost of pf. Stock)

Q16. What is ‘capital structure’?

Ans. The capital structure is how a firm finances its overall operations and growth by using different sources of
funds.

Check out IFRS Course

Q17. What is a ‘goodwill’?

Ans. Goodwill is an asset that captures excess of the purchase price over fair market value of an acquired
business.

The above questions and answers will help you in your preparation for the next interview for a position of
financial analyst. It will provide you with an idea of the type of questions that are generally asked. However, you
need to be prepared to answer all types of questions — technical skills, interpersonal, leadership or methodology.

If you are looking to be successful in the financial industry, enrol yourself for a financial analyst certification
course to understand the techniques and skills required to be an expert.

About the Author

Hasibuddin Ahmed

Hasib is a professional writer associated with learning.naukri.com. He has written a number of articles related to
technology, marketing, and career on various blogs and websites. As an amateur career guru, he often imparts
nuggets of knowledge related to leadership and motivation. He is also an avid reader and passionate about the
beautiful game of football.
Topics : Banking, Finance and Analytics, Interview Questions
Tags : finance, interview questions

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