7 Most Common Finance Interview Questions

Preparing to interview for a job in finance?

Finance and accounting are very rewarding fields with a great outlook and a lot of upward mobility. But first, you’ve got to get in the door. To help you be more prepared, here are seven of the most common finance interview questions!

 

1 | If you could only use one financial statement to assess the health of the company, which one would you choose and why?

This is a great question because it can reveal a lot. There isn’t really a right or wrong answer—and it’s highly recommended to use all of the statements to assess a company—but it lets you show your knowledge of financial statements as well as what you find to be the most important measurements for a healthy company.

Depending on the industry, and the company itself, there are crucial insights to gain from each statement. Some industries/companies place a high value on cash flow and need it to be in good shape. Others may need to focus on profit margins and cost management. And others are focused on leveraging their assets to drive profitability. You need to show that you understand the priority of the company and the overall needs in the industry.

 

2 | Tell me about a high-stress situation you were in and how you handled it.

Finance can definitely be stressful at times. After all, you’re responsible to help make major decisions with serious consequences. Your prospective employer will want to know how you handle stress and that you can deal with the work environment you’re likely to face.

Make sure you’re prepared for “fit” questions like this because finance interviews are likely to include them. They want to know if you’re well-suited for the job and for the company. Spend some time thinking about stressful situations, challenges, strengths, and weaknesses in advance so you have something to pull from during the interview.

These questions are also a great opportunity to tell stories about yourself. For instance, maybe you have a stressful situation in mind that’s related to finance or showcases a strength or skill you’re proud of. That’s a win/win.

 

3 | When should a company issue debt instead of equity?

Expect technical questions like this to test what you know and also to make sure your thinking lines up with the company. That’s not to say they’re looking for a department full of “yes people” but if they have a preference for doing things a certain way they’ll be looking for people who share the same values and priorities.

This question is an opportunity for you to talk strategy. Mention the variables that need to be taken into consideration, like cash flow, interest payments, tax shields, and the weighted average cost of capital for the company.

 

4 | Walk me through the financial statements.

You’ll probably hear a few questions like this, asking you to demonstrate knowledge of the basics. The interviewer wants to be sure that you understand finance and also that you can clearly communicate and present what you know.

Working in finance, you’ll need to not only analyze numbers but also share your analysis with people who... well... aren’t in finance. You can be sure they’re watching and listening to how clearly and confidently you communicate to see if you could do the same with crucial financial data.

Just for the record: The Balance Sheet shows assets, liabilities, and shareholder’s equity. The Income Statement shows revenues, expenses, and net income. The Cash Flow Statement shows cash inflows and outflows from operating, investing, and financing activities.

 

5 | How do you explain complex financial issues to team members in other departments?

Accounting and finance people have long enjoyed jargon-filled conversations about money. It’s like talking in a secret code or carrying on with your friends in Klingon. But, as we’ve seen, the finance function is changing. Finance professionals are being asked to play a more strategic role and with that, there’s an increased need to clearly communicate with people who don’t speak finance.

Not only is it important to prepare for a question like this it’s also critical to build your skills so you’re prepared to succeed in your new role.

 

6 | What’s the biggest financial challenge facing our industry today?

Employers are looking for prospects who understand finance, understand the industry, and have taken the time to research current issues. If you can demonstrate that you’ve put in the time to study you’ll be a step ahead of other candidates.

 

7 | If you were CFO, what about our company would keep you up at night? 

Questions like this go beyond the basics of understanding finance. You’re not going to find the answer by mentally retracing your steps through your finance textbooks. This is partly a test of how well you apply your knowledge to real-life situations. More than that, though, it’s a test of how well you know the company and how much time you spent doing your homework on your prospective employer.

So... make sure you do your homework.

You should have examples of what to watch for and what to worry about on each financial statement, specific to the company if at all possible. If you don’t have specifics for the company that’s interviewing you, at least make sure you’ve studied the industry to see what trends and issues are relevant and what to look for.

 

Conclusion

If you want to ace your finance interview, make sure you’ve got the fundamentals down pat. Then take the time to think about your own strengths, weaknesses, and previous experiences so you’re not caught off guard when asked about yourself and how you fit with the company culture. Finally, take the time to research the company you’re interviewing with and the state of their industry.

You’ve got this. Best of luck and we’ll see you on the other side.