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Top Interview Questions and Answers in Finance

Top Interview Questions and Answers in Finance

During a finance interview, you might be asked anything from general questions about the job to hard math problems. If you practice for this kind of job interview, you can get better at being able to think critically and give clear, concise answers even when you’re very nervous.

Reviewing common finance interview questions with a friend or family member can help you make a good impression. This article goes over some common finance interview questions and gives you some sample answers to help you prepare for your next finance interview.

Finance interview questions

In the next section is a list of twenty possible finance interview questions that a hiring manager could ask you during a job interview to find out how qualified you are for the job.

  • What is the best financial decision you’ve made so far?
  • What would you look at if you could only look at one type of statement to figure out a company’s financial health?
  • What are three types of short-term loans that our business could use to get the cash it needs?
  • If we bought something, what would happen to our balance sheet, income statement, and cash flow statement?
  • How is a bond’s clean price different from its dirty price?
  • What are the most common ways to figure out how much something is worth?
  • How do you put together a cash flow statement, and what does it tell you?
  • Why could we use a tax bill that isn’t paid right away?
  • What is the DFC method, and why might we want to use it?
  • If you were the CFO of the company, what would you do first?
  • How do you talk to coworkers from other departments about complicated financial issues?
  • How do the three main types of financial statements fit together, and why is this important?
  • What are the three most important things a business in our field could do to make more money?
  • What is our industry’s biggest problem with money right now?
  • How much money do you think our industry will make in the next ten years?
  • How can I find out how much a company is worth, and which method is best for my business?
  • Why wouldn’t a business borrow money to pay for operations?
  • What makes you want to work in finance?
  • How do you deal with account holders when things are really hard?
  • What do you do well and what do you need to work on when it comes to money?

Money-related questions and examples of how to answer them

In the next section, we’ll look at ten of the above questions and give you examples and explanations for each one to help you come up with your own answer.

  • What makes you want to work in finance?
  • What is the best financial decision you’ve made so far?
  • What do you do well and what do you need to work on when it comes to money?
  • What are three types of short-term loans that our business could use to get the cash it needs?
  • If we bought something, what would happen to our balance sheet, income statement, and cash flow statement?
  • How do you put together a cash flow statement, and what does it tell you?
  • What is the DFC method, and why might we want to use it?
  • How can I find out how much a company is worth, and which method is best for my business?
  • Why wouldn’t a business borrow money to pay for operations?
  • How do you deal with account holders when things are really hard?

What makes you want to work in finance?

Employers want to hire people who are passionate about what they do. Explain what you like best about finance to show how much you want to work in this field and how well you want to do it.

Example: “I went into finance because I like to use numbers to figure out how to solve problems. I like how a financial equation may only have one right answer, but there are many ways to solve it. If you look at a problem from the right angle, you might be able to find more money when you need it the most. When I find a way to do that, I’m very happy.”

What is the best financial decision you’ve made so far?

When you talk about your biggest accomplishment, you show the hiring manager not only what you can do, but also what you value most.

Example: “As a financial planner, my proudest moment was helping a client pay off $60,000 in debt over two years and start a college fund for his son. I like seeing how the services I provide can help people.”

What do you do well and what do you need to work on when it comes to money?

It will be hard to talk about your strengths and weaknesses in almost every type of interview. If you want a job in finance, you should tailor your answer to the skills you need and the challenges you face in this field. Answer honestly, but make it clear that you’re working to make up for your weaknesses so they don’t get in the way of your job.

Example: “Making a budget is my best skill when it comes to money. I like learning about the different ways to make a budget and figuring out how the right kind of budgeting can help me make better predictions. Most likely, my biggest flaw is that I don’t change. I like to find new ways to do things I already know how to do, so I sometimes have to make duplicate reports so I can send monthly statements to managers in the way they are used to.”

What are three types of short-term loans that our business could use to get the cash it needs?

If your business is having money problems, it will need a finance expert who knows how to fix the problem quickly. By asking you this question, the interviewer might be trying to see how well you can spot and solve problems related to paying your current debts.

Example: “You could use trade credit, a bank loan, or an overdraft from your bank if you need cash right away. After I fixed the immediate cash flow problem, the first thing on my list would be a thorough review of all financial statements to make sure this kind of problem didn’t happen again.”

If we bought something, what would happen to our balance sheet, income statement, and cash flow statement?

This question checks how well you know how to use money to buy things. Give a short answer that even someone who doesn’t know much about money can understand.

Example: “Your balance sheet would show that the purchase added to your assets. At the end of the year, the loss from this asset will be shown on the income statement. On the cash flow statement, the buy can be seen as an investment.”

How do you put together a cash flow statement, and what does it tell you?

Finance workers should know how to put together a cash flow statement and what it can tell them. By asking this question, the interviewer might be trying to find out how much experience you have in the finance industry. Your answer should show how well you know how to read cash-flow statements.

Example: “On a cash flow statement, you can see how much money comes in from running the business, making investments, and paying for things. You can also see other things, like how much was paid in interest or taxes. The cash flow statement shows how the company’s cash and cash equivalents have changed between the beginning and end of an accounting period, as shown on the balance sheet.”

What is the DCF method, and why might we want to use it?

Businesses can plan for the future with the DCF method. In your answer, you can explain how you’ll set up the business to be successful in the long run.

Example: “Using future cash flows, the DCF method figures out how much an investment is worth. This helps a business figure out, based on its current cash flow, how much money it will make in the future. With this method, you would carefully plan for the future.”

How can I find out how much a company is worth, and which method is best for my business?

Your ability to put a price on a business will show the hiring manager how you think about the hiring company and its competitors. It can also show how much you know about the business you are interviewing with and the industry as a whole.

Example: “You can judge a business by its assets, its past earnings, its discount cash flow, or its ability to keep making money in the future. Based on how much money your business has made in the past, I would look at its long-term trends.”

Why wouldn’t a business borrow money to pay for operations?

A business can get money in two different ways: by taking on debt or by getting money from investors. This question could be asked by the person in charge of hiring to see how you handle tasks that have to do with money.

Example: “A company might use stock instead of debt to fund its operations because stock is less risky than debt. Even though you might lose some control to the investors, you will gain stability and be able to plan for the future in a more long-term way.”

How do you deal with account holders when things are really hard?

When you work directly with clients, you need good customer service skills that will help you deal with hard situations. Hiring managers want to know if you can handle these situations well and keep clients while making them more loyal.

Example: “I’ve found that clients feel better about a situation when they feel like they’ve been heard. I pay close attention to what the customer says and repeat what they say to make sure I understand the problem correctly. Then, I tell the client that I understand how they feel and that it’s okay for them to be upset. This usually calms down the situation and helps me help them find the best solution for their needs.”

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