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Financial Analyst Interview Questions

Position Summary

A financial analyst evaluates data in order to help businesses make better financial decisions. They accomplish this by consolidating and analyzing data, generating reports about status and potential risks, and developing financial models.

A financial analyst acts in a largely technical capacity. They must have a good eye for detail and organization in order to accurately report on the status of a business. In addition, they must be able to take the data they evaluate and use it to develop creative new ways to increase productivity and sales.


Financial analyst responsibilities may include:

  • Developing financial models
  • Conducting benchmark and processing analysis
  • Creating monthly expense reports and providing variance analysis
  • Researching trends within the industry, similar companies, and past financial statements
  • Recommending appropriate action based on data analysis results


Financial analysts are responsible for creating an accurate representation of company finances. In order to accurately generate reports, mine data, and provide advice, a skilled financial analyst will:

  • Accurately interpret data
  • Communicate data and plans of action clearly to upper level management and executives
  • Possess an eye for detail in order to repair and correct data as needed
  • Stay on top of current events in order to predict industry trends
  • Work with little-to-no supervision


A financial analyst is the contact point between the company’s management and its data. Therefore, the position occupies an important role within the business. Most employers will want a financial analyst with at least a bachelor’s degree in finance or a related field. 

In addition, an expert understanding of industry data is required, so experience with forecasting, reporting, statistics, and financial modeling will all help in securing a job within the field.

If you’re getting ready to interview for a position as a financial analyst, you can prepare by researching the company as much as possible. Learn about the 9 things you should research before an interview.


Salaries for financial analysts range between $91K and $151K with the median being $116K. 

Factors impacting the salary you receive as a financial analyst include:

  • Degrees (associate's or equivalent certificate, bachelor's, master's)
  • Years of Experience
  • Location
  • Reporting Structure (seniority of the executive you report to, number of any direct reports)
  • Level of Performance - Exceeding Expectations

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Financial Analyst Interview Questions

Question: How do you go about developing investment recommendations for your management team?

Explanation: This is a general or opening question an interviewer will ask early in the interview. The purpose of a question of this nature is to start the conversation, learn a little bit more about your background, and gather information the interviewer can use for subsequent questions.

Example: “When making investment recommendations for the leadership team, I first make sure I understand the business’s investment objectives as well as their tolerance for risk. I then gather information and create a portfolio of investments that will provide the desired rate of return with the appropriate amount of risk the company is willing to accept. Information I use to justify my recommendations includes the investment's past performance, forecasts for future returns, and the results they provide relative to other investment options within the same class.”

Question: What is included when calculating EBITDA?

Explanation: This is a technical question. Technical questions typically seek to understand your knowledge of terms or concepts used in the position for which you are interviewing. Technical questions are best answered directly, concisely, and with little embellishment. The interviewer will request additional information if they need it.

Example: “EBITDA stands forEearnings Before Interest, Taxes, Depreciation, and Amortization. This measures a company’s operational performance without the influence of any financial actions or decisions. It is calculated by using the company’s operating income, subtracting any operating expenses, and confirming that no interest, taxes, depreciation, or amortization are included in the expense column. Another method to calculate this is to use the organization’s net income and add back the interest, taxes, depreciation, and amortization.”

Question: What would you do if you discovered a discrepancy in the details of the income statement?

Explanation: On the surface, this question may look like an operational question, asking what process you would use to correct an error.  In reality, it is the question about your integrity and whether you would try to conceal an error. The best way to respond to this type of question is first to assure the interviewer that you would act with integrity and then explain how you would go about correcting the error.

Example: “While I take steps to make sure my work is error free, on occasion, I miss something which I discover later. I always take steps to correct this. If the error involved a discrepancy in the details of the income statement, I would first confirm the discrepancy. Once I accomplished this, I would ask the accounting department to create a journal entry that would reverse the entry that created the error. I would then rerun the income statement to confirm that it was now accurate.”

Question: Imagine you created a report for senior management and realized you made a mistake, even though your supervisor didn’t notice it. What would you do?

Explanation: This is an example of a follow-up question. The interviewer is asking a follow-up question based on the answer you provided to the previous one. Any time you answer a question during an interview, you should be prepared for follow-up questions.

Example: “As I mentioned earlier, I work hard to ensure my work is accurate and error-free. If I do discover an error, I immediately take steps to correct it, even if this involves a report or statement that has already been submitted to the management team. I do this even if the team has not discovered the error and with the knowledge that this may impact their evaluation of my performance. It is more important to be accurate than to create an image of never making mistakes.”

Question: How would you explain the concept of ROE to someone who has no financial background?

Explanation: This operational question seeks to understand your ability to communicate complex financial terms and concepts to individuals within the company who don’t have a strong financial background. This is important because many people in the organization need to know the results of your work but not necessarily how you go about obtaining those results. Your ability to communicate this during the interview will be crucial to you being able to get the job.

Example: “When communicating complex financial information to people with nonfinancial backgrounds, I am meticulous in using terminology they understand to explain the concept in a manner which makes it clear. I start by defining the term or concept using nonfinancial terminology. I then give an example of how the concept is used. I finish by asking questions to ensure they understood what I told them. In the case of ROE, I would explain that it stands for Return On Equity. This describes any income earned or lost on an equity investment. Equities are any item which has value and can include cash, securities, or property. The returns are typically measured as a percentage of the value of the equity invested. I include a statement as to whether the percentage meets expectations and is in line with similar types of investments.”

Question: What is net present value (NPV), and how do you use it?

Explanation: This is another technical question which is asking you to define a term used within the financial world. As a financial analyst, you should be able to discuss this easily. Keep your answer short and direct, and anticipate a follow-up question.

Example: “Net present value is the difference between the present value of cash or cash equivalent inflows and the present value of outflows during a reporting period. This concept is used for budgeting and investment purposes. It will indicate whether an investment will provide either a negative or positive return based on the forecast of cash flows going forward.”

Question: Name one of the essential financial statements financial professionals use to analyze a company’s performance and what information it provides.

Explanation: This is a technical question that is asking you about financial statements. As a financial analyst, financial statements are the basis of your profession. These are what you use to analyze a company’s performance or value and provide recommendations to the management team which they use in making decisions about the business. You should have in-depth knowledge of the four critical financial statements, including their content, purpose, and use.

Example: “The financial statement which I use the most is the income statement. This provides a summary of an organization’s operations and indicates whether they are making or losing money. It also identifies areas of the operation which are contributing to the profits or loss which need to be addressed by the management team. Finally, the income statement will indicate if the company is generating operational income which can be channeled into other investments which will, in turn, generate incremental income.”

Question: Can you explain a cash flow statement, including its components and use?

Explanation: You probably already recognized this as a follow-up question to the previous one. In your last answer, you identified an income statement and described its use. The interviewer is now asking you to do the same for a cash flow statement. As a reminder, you should anticipate follow-up questions any time you provide an answer to an interviewer’s query.

Example: "The cash flow statement is a financial statement that provides information about the cash inflows and outflows of an organization. It has three selections which include operational, investing, and financial activities. It also takes into account noncash adjustments, such as depreciation or amortization. It will indicate whether a company is generating free cash from its operations which can be reinvested or used for other purposes."

Question: How would a company’s income statement change if the debts owed to the company increased during the reporting period?

Explanation: This is another operational question that determines your knowledge of how a financial activity or event will impact the financial reports for an organization. As an experienced financial analyst, you should be able to answer this question easily. Don’t assume the interviewer has a strong financial background, and make sure to use basic terminology which any layman would understand.

Example: “The impact on the company’s income statement due to an increase in debts owed to the company would depend on the source of the debt and the reason it increased. In general, an increase in debt would indicate an increase in income and would have a positive effect on the income statement. However, if the debts were a result of a transaction whose income had already been accounted for, then the debt increase would have no impact on the income statement. Another way the debt may impact the income statement is if a corresponding increase in interest owed associated with the debt occurred which again would have a positive impact on the income statement.”

Question: What are the common financial ratios that financial analysts use to evaluate a company?

Explanation: This technical question is straightforward and addresses one of the critical functions of a financial analyst. The use of ratios is standard within the financial industry, and it enables a financial analyst to quickly determine the health of a company, its performance, and whether it would be a sound investment. There are several different financial ratios analysts can use. Your answer should indicate the ones you prefer, and why.

Example: “Financial ratios are simple comparisons between two financial performance metrics. I use a limited number of financial ratios when evaluating a company. These include the working capital ratio, the quick ratio, earnings per share, price-to-earnings ratio, debt-equity ratio, and return on equity. The one I prefer is the quick ratio which compares current assets to current liabilities after the inventory has been removed from the assets. This indicates the financial health of the company and its ability to service its debt.”

Question: What information do you need to produce an annual report for a publicly owned organization?

Explanation: This is an operational question that will help the interviewer understand your ability to prepare an annual financial report for the company. In your role as a financial analyst, your job is to collect the financial information, summarize it in a fashion which is easy to understand, add some commentary, and issue a report reflecting the company’s prior year’s performance. Knowing what information is required in the report will ensure the interviewer of your ability to do this.

Example: “Annual reports differ between organizations, but the information needed to produce these is generally the same. This includes the four primary financial statements which are the income statement, the balance sheet, the cash flow statement, and the statement of shareholder equity. Also included are commentary from the management team, a general description of the industry the company operates within, a listing of the company’s key executives, and a statement about the market price of the company’s stock and any dividends the company is paying.”

Additional Financial Analyst Interview Questions

  • What single financial statement would you choose to value a company, and why?

  • Can you explain why dividends are not part of an income statement?

  • What do you think is better - increasing prices by 1% or increasing the customer base by 1%?

  • Describe and explain a cash-flow statement.

  • What financial analysis software do you have experience with?

A word of warning when using question lists.

Question lists offer a convenient way to start practicing for your interview. Unfortunately, they do little to recreate actual interview pressure. In a real interview you’ll never know what’s coming, and that’s what makes interviews so stressful.

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