What Financial Analyst Interview Questions Should You Prepare for?
If you’re preparing for a financial analyst interview, we’ve got you covered. We asked nine professionals to share their top interview questions. From simplifying complex financial concepts to understanding complex financial problems, here are their top nine recommendations to help you ace your interview.
- Simplify Complex Financial Concepts
- Display Financial Modeling Expertise
- Demonstrate Project Development Skills
- Stay Updated With Industry Trends
- Showcase Financial Analysis Experience
- Identify Risks from Financial Statements
- Excel in Excel Skills
- Develop Investment Recommendations
- Understand Financial Performance Measures
Simplify Complex Financial Concepts
One question that often catches candidates off guard is, “Can you explain a complex financial concept as if you were talking to a five-year-old?” This question isn’t about testing your knowledge of finance—that’s a given. It’s about your ability to distill complex ideas into simple, digestible terms.
It’s the difference between saying, “A bond is a debt security, under which the issuer owes the holders a debt and must pay them interest,” and saying, “A bond is like a promise. You lend your toy to a friend, and they promise to give it back, but also give you an extra toy as a thank you.”
The ability to simplify without losing the essence is a skill that separates good financial analysts from great ones. It’s the financial equivalent of turning water into wine, and it’s a skill that’s as rare as a unicorn in a field of horses. If you’re preparing for an interview, practice your storytelling skills. They might just land you the job.
James Allen, Founder, CPA, CFP, and CFEI, Billpin.com
Display Financial Modeling Expertise
As a candidate for a financial analyst position, expect a range of interview questions that assess technical knowledge, analytical skills, and suitability for the role. One likely to come up is:
“What financial modeling techniques and tools are you familiar with? Can you provide examples of how you have applied them in your previous roles?”
Sharing the application piece is critical, as it shows the candidate possesses the skills and has also used it successfully in a work situation.
Kelli Anderson, Career Coach, Resume Seed
Demonstrate Project Development Skills
“Can you describe a financial project or model you developed and how it helped inform a business decision?” This question is critical as it tests your technical skills and your ability to apply them in real-world scenarios.
It allows interviewers to gauge your understanding of how financial analysis can affect business decisions, demonstrating your value as a strategic business partner.
Michael Sena, Founder and CEO, SENACEA
Stay Updated With Industry Trends
A crucial interview question to prepare for as a candidate for a financial analyst position is, “How do you stay updated with the latest trends and developments in the finance industry?” As a financial analyst, staying informed about industry trends, regulations, and economic factors is essential for making accurate financial assessments and recommendations.
The ideal candidate would showcase their proactive approach to continuous learning by mentioning various sources they use, such as reputable financial publications, industry-specific websites, and by attending relevant conferences or seminars.
They might also highlight their participation in professional networks or memberships in finance-related associations. A strong candidate would emphasize their ability to translate industry knowledge into actionable insights and strategic decision-making.
Luciano Colos, Founder and CEO, PitchGrade
Identify Risks from Financial Statements
“Can you provide an example of a time when you successfully analyzed a company’s financial statements to identify potential risks or opportunities?”
This question allows the candidate to showcase their practical financial analysis skills and show their ability to identify key insights from financial statements. It also provides an opportunity for the candidate to share a specific and tangible example, which helps the interviewer assess their proficiency and experience in the role.
For instance, the candidate could discuss how they analyzed a company’s balance sheet and income statement to identify financial risks, such as rising debt levels. They could then explain how they used relevant ratios and financial indicators to assess the potential impact of this risk on the company’s performance and recommend mitigating it.
This shows their ability to interpret financial data, assess risks, and provide actionable insights to support informed decision-making.
Yoana Wong, Co-Founder, Secret Florists
Excel in Excel Skills
There is no financial analyst job that will not require exceptional Excel skills. Aside from honing weak areas or taking a course to improve your speed and skills, it’s smart to know all the key functions.
It would be a shame to be asked what the MODE.SNGL function is and looks like a deer in the headlights. Because it’s specific and technical knowledge, it’s a prominent topic to put into flashcards.
In the weeks leading up to the interview, train yourself on a broad function list. The worst thing that can happen is you will improve your knowledge massively and be ready for the next one.
Trevor Ewen, COO, QBench
Develop Investment Recommendations
When preparing for a financial analyst role, it’s essential to be ready for the question, “How would you develop an investment recommendation for senior management?”
Showcasing your analytical thinking is key. Start by explaining the data you’d gather, like financial statements, market trends, and industry research. Mention the importance of considering potential risks and competition.
Also, highlight collaboration by discussing the stakeholders you’d work with, such as portfolio managers or senior executives. Remember, the interviewer wants insights into your approach, not just technical details.
Tobias Liebsch, Co-Founder, Fintalent.io
Understand Financial Performance Measures
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It is a measure of a company’s financial performance. It can be described as an organization’s net income without interest income, costs related to debt instruments, depreciation, amortization, etc.
When deciding on a company based on financial statements, it’s not just about picking the one you like best, such as an income statement, a balance sheet, a statement of shareholder equity, or a cash flow statement. It’s also important to explain why you think it’s the best source of information for a particular situation and why alternative financial statements might not be good picks.
Loretta Kilday, DebtCC Spokesperson, Debt Consolidation Care