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Interview Prep for Financial Analysts

by Giulio Rocca

If you're planning to interview for a financial analyst position, it's imperative to prepare ahead of time. Financial analysts fall under two categories: buy-side analysts, who invest money on behalf of their employers, and sell-side analysts, who advise buy-side analysts on investment opportunities. When interviewing for either role, you'll need to be ready to discuss your qualifications and brush up on your knowledge of investments in stocks, bonds and other asset classes. In 2010, the average financial analyst earned a salary of $74,350, and the top 10 percent earned $141,700. There are approximately 236,000 financial analysts jobs nationwide.

Questions About Qualifications

Interviewers will ask candidates to discuss their education, skills and experience. Before the interview, identify your strengths and prepare to articulate how your background sets you up for success as a financial analyst. Those with backgrounds in business, finance and accounting can cite the relevance of their education. Those with training in other quantitative fields, such as mathematics, engineering or physics, can highlight their analytical skills. Even candidates from other backgrounds, such as the humanities and social sciences, can still argue the usefulness of their skills. For example, an English major or journalist might emphasize the importance of communication skills in producing investment research reports.

Questions About Career Goals

Prepare to discuss your goals and how they align with the financial analyst role. Think about your motivations for applying to the position and rank them in order of importance. Break down your goals into short-term and long-term objectives so you can readily answer questions such as: “Where do you see yourself in five years? Ten years?” Finally, research the employer and its competitors, including their competitive strategies, capabilities and organizational cultures. This groundwork will help during the interview when asked why you want to work for this particular company.

Questions About Accounting

After the qualitative portion of the interview, candidates are typically asked technical questions. To prepare for this section of the interview it's important to brush up on your accounting concepts. Even those without a background in business, finance or accounting should be prepared for technical questions. Dust off an accounting textbook and review it. Interviewers often ask candidates to walk them through the four financial statements and how they're interconnected. They may also ask hypothetical questions about specific transactions and the associated accounting entries. For example, “What is the impact of buying a $10 million piece of equipment on the financial statements?”

Questions About Finance

In addition to a solid grasp of accounting, financial analysts must be well-versed in financial analysis. In order to prepare for these interview questions crack open a finance textbook to review key financial concepts. Make sure that you're fluent in the major valuation methodologies such as discounted free cash flows and comparable companies’ analysis. Also review how free cash flows are calculated and practice performing calculations with actual financial statements. Some interviewers may ask you to perform mental calculations, so be ready.

About the Author

Giulio Rocca's background is in investment banking and management consulting, including advising Fortune 500 companies on mergers and acquisitions and corporate strategy. He also founded GradSchoolHeaven.com, an online resource for graduate school applicants. He holds a Bachelor of Science in economics from the University of Pennsylvania, a Master of Arts in English from the University of Hawaii at Manoa, and a Master of Business Administration from Harvard University.

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