If you are preparing for a job interview related to the Finance domain, it becomes very important for you to know the types of questions that can be asked. Most Corporate Finance interview questions aim to evaluate the financial proficiency of the candidates by taking them through a series of questions related to various facets and dynamics of the subject. So, if you have recently graduated with an MBA in Finance degree or have working experience after completing an undergraduate degree like BA (Hons) in Accounting and Finance, and want to explore career opportunities, then here is a blog where a list of Finance interview questions which has been compiled!
This Blog Includes:
Types of Finance Interview Questions
Although every company follows its own standards and procedures to recruit candidates, there are two main types of categories into which Finance interview questions can be clubbed. These are namely, Technical and Behavioural/Fit questions.
Behavioral and Cultural-Fit Questions
Through this, your communication and soft skills like leadership qualities, ability to work with a team, problem-solving tactics, commitment, creative thinking, and your overall personality will be examined. Thus, before going for an interview, it’s very important to practice these types of questions. Some of the General behavioral questions asked by employers are:
- Strength and Weakness
- “Why Should We Hire You?”
- Your Idea About the Job Profile
- About the Company
Since we are discussing Finance interview questions, this is where you need to lay emphasis on. The interviewer will be subject-specific and will ask technical questions related to Finance and Accounting to evaluate your subject knowledge and analytical skills. It’s very important to be brief and give to the point answers. Questions can be framed on topics like:
- Financial Modeling
- Financial Statements
- Balance Sheet
- Bank Reconciliation
- Cost Accountancy
- Types of Accounts, etc.
Common Finance Interview Questions
Here’s a list of the most commonly asked interview questions for Finance:
- What is Finance?
- What do you understand by working capital?
- What is a cash flow statement? Explain.
- Can a company show positive net income and yet go bankrupt?
- What is hedging and how it works in Investing?
- What is preference and equity capital?
- What is fair value and value in use?
- What is RAROC?
- What is the secondary market?
- What is cost accountancy? What are its objectives?
Finance Interview Questions for Freshers
Usually, a fresher does not have much working knowledge, so interview questions are mostly theoretical based and focus more on Working Capital, Cash Management, Debit and Credit postings, Bank Reconciliation, etc. Here are some of the important Finance interview questions for freshers:
- Elucidate the main duties and responsibilities of a Finance Executive
- What are Adjustment Entries? Why are they passed?
- What is a Deferred Tax Asset and why might one be created?
- Why are Profit and Loss Accounts prepared?
- Explain Financial Accounting. What are its characteristic features?
- What are the various streams of Accounting?
- Compare Financial Accounting with Cost Accounting.
- Define Management Accounting. What are its objectives?
- What is the scope of Management Accounting?
- What is a Balance Sheet? Why is it prepared?
- Why did you choose MBA?
- What are the different types of expenditures considered for the purpose of accounting?
- Explain Share Capital Reserves and Surplus Testing.
Finance Interview Questions for Experienced Professionals
When it comes to the personal interview of experienced professionals, the questions can range broadly from theory to practice and can be related to your past experiences, work profiles, contracts, Wealth Management, etc. We have compiled a set of Finance interview questions for experienced professionals below:
- What is the difference between a Journal and a Ledger?
- Briefly explain the Financial Statements of a company. What information does it give about the organisation?
- Explain three sources of short-term Finance used by a company.
- Explain the “Cash Flow Statement” in detail.
- Define “Working Capital”
- What are the different types of Bonds?
- Briefly explain “Scrutinized Bonds”.
- Can a company, which has high leverage risk, still have positive cash flow?
- What are the different types of EPS? How to calculate EPS?
- How will you differentiate between Futures Contract and Forwards Contract?
- Explain ‘Financial Modelling’.
- Do you follow the Stock Market? If yes, than which stocks in particular?
- What do you think is the best evaluation metric for analysing a company’s stock?
- What do you understand by NPV? Where is it used?
- What do you mean by “Composite Cost of Capital”?
Tips to Prepare for Finance Interview
Here are certain tips and tricks that will certainly help you to crack the interview.
- Before going for the interview, skim through your CV/Resume, identify your key accomplishments/skills, and practice important questions on the same.
- Conduct thorough research on the company’s profile, financial history, competitors and clients, mission/vision, etc.
- To answer Finance interview questions, use a structured approach i.e, explain the answer pointwise.
- Take your time and plan your answer according to the question and sound confident.
- If you don’t know the exact answer, state the things that are relevant to the question, and stick to the point. Don’t be afraid to say “Sorry, I’m not sure”. It is much better than guessing or making stuff up.
- Illustrate your line of reasoning. Show that you have excellent logical thinking and have the ability to solve problems.
Technical questions may be asked for the following topics:
What is Finance?
What do you understand by working capital?
What is a cash flow statement? Explain.
Can a company show positive net income and yet go bankrupt?
What is hedging and how it works in Investing?
Elucidate the main duties and responsibilities of a Finance Executive
What are Adjustment Entries? Why are they passed?
What is a Deferred Tax Asset and why might one be created?
Why are Profit and Loss Accounts prepared?
Explain Financial Accounting. What are its characteristic features?
What are the various streams of Accounting?
Compare Financial Accounting with Cost Accounting.
Hence, a thorough understanding of the domain coupled with excellent communication skills can help you answer Finance interview questions with ease! Want to pursue a course in Finance from top universities abroad but not sure how to go about it? Then sign up for an E-meeting with the experts at Leverage Edu who will not only provide assistance in completing admission formalities but will also help in writing an impeccable SOP!