Finance Interview Preparation Essay

1493 Words May 7th, 2011 6 Pages
Finance Technical Interview Questions

|Corporate Finance |

• What could a company do with excess cash on the balance sheet? • What’s the difference between IRR, NPV and Payback? • What are the impacts on earnings if a company builds a new factory using debt? operating lease? capital lease? cash? • Why would a company repurchase its own stock? What signals (positive & negative) does this send to the market? • When would you take a project with a negative NPV? • What is Sarbanes Oxley and what are the implications? • Why might a company choose debt over equity financing, or vice versa? • What are
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• What is the difference between cash and accrual accounting? • If Accounts Receivable increases during the period, how does that impact cash? • What is a 10K? What is a 10Q? • What are deferred taxes? How do they arise? • If I under-depreciated by $3,000, walk me through how that would affect the financial statements. • Which of the three financial reporting statements (balance sheet, income statement, statement of cash flows) is most important and why do you believe this is so? • Assume that you have a significant amount of inventory on hand. What control measures could you put in place to ensure employees aren’t running off with your inventory? • How would you go about forecasting balance sheet accounts in the future—specifically inventory, accounts receivable, and accounts payable?

Mergers & Acquisitions

• Why would two companies merge? What major factors drive mergers and acquisitions? • What’s the difference between I-banking and Private Equity? • Would you make an offer to buy a company at its current stock price? • If a company with a P/E of 20 acquires a company with a P/E of 15 with stock, is the transaction accretive or dilutive? • What is the difference between a stock purchase and an asset purchase? • What are the major differences between purchase and pooling accounting? What is the current state of both methods of accounting? • What are some common anti-takeover tactics? • Would you pay more for an asset/company

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