The position of financial analyst is considered to be a very lucrative job opportunity. This is one of the best finance jobs available in the job market which can really pay you well if you have all the qualities to become a successful financial analyst. The main task of a financial analyst is to give precise investment advice for the organization to maximize their profits. Entry-level financial analyst interview questions are generally tough and challenging and would require you to think in an analytical way. This is the reason you need to go through some sample financial analyst job interview questions and answers. The financial analyst salary has seen a growing trend over the years. Before we discuss these interview questions, let us first acquaint ourselves with the financial analyst job description in the next paragraph.

Job Description of a Financial Analyst

A financial analyst is responsible for conducting a general financial analysis of the reports which he receives from various departments of the company in which he works. These departments can be the marketing department, sales department or the production department. Financial analysts conduct a detail research over the various investment opportunities and prepare a final report of the same. This report is discussed by them with seniors or the higher management of the organization. The task of these analysts, who are sometimes also called business analysts, becomes extremely important as any wrong investment or financial decision can really be harmful to the interests of the company. Financial management, reading financial statements of the organization, learning new techniques of financial analysis and fact verification are some other tasks which are performed by financial analysts. In order to become a financial analyst, you should ideally have a graduation degree in marketing, sales or preferably in finance. A postgraduate or doctorate can increase your chances of getting a high-flying job to a great extent. Now, having understood the duties of a financial analyst, let us know about the financial analyst interview questions in the next paragraph.

Commonly Asked Financial Analyst Interview Questions

General Questions

Tell me about yourself and your educational qualifications What exactly was your job profile in your last job? What was the reason for you to resign from your last job? Are you really interested and looking forward to a career in the finance sector? Where do you see yourself five to seven years from now, personally and professionally? Why should we hire you? Are you ready to give your hundred percent while doing all the work given to you? Are you capable of working in a team? What is the salary that you expect? Do you have a positive attitude and passion for your work?

Most Commonly Asked Technical Questions

Are you capable of creating sales reports for the entire month?

Can you explain the concept of capital market? Explain the importance of ratio analysis in financial planning Which practices are used for financial reporting? Which profitability models are generally used for forecasting? How can you calculate the cash flows of a company? Which stocks do you track and why? Give the exact definition of marginal costing What precautionary steps do you take to avoid giving wrong financial analysis? Which are the latest software available for accurate financial analysis? Can you state the advantages and disadvantages of activity based costing? Have you ever committed mistakes in your task of financial analysis? If yes, then how

did you rectify them? Which method do you follow to find the valuation of a company and why?

The above mentioned sample financial analyst interview questions will certainly help you prepare well for this great job. Though these questions are likely, you may be asked something different, which will test how firm your basics in finance are. So, it is always advisable to study hard and keep yourself updated on the latest happenings in the world of finance. Hoping that you will try your best to explore these career opportunities in the financial sector, I would like to sign off here wishing you all the best for your career!

1. Explain the importance of ratio analysis in financial planning?

Ratio Analysis is the basic tool of financial analysis and Financial analysis itself is an important part of any business planning process as SWOT (Strengths, Weaknesses, Opportunities and Threats), being the basic tool of the strategic analysis plays a vital role in a business planning process and no SWOT analysis would be complete without an analysis of companies financial position. In this way Ratio Analysis is very important part of whole business strategic planning.

2. Which practices are used for financial reporting?

Financial reporting should provide information that is:

useful to present to potential investors and creditors and other users in making rational investment, credit, and other financial decisions.

helpful to present to potential investors and creditors and other users in assessing the amounts, timing, and uncertainty of prospective cash receipts.

about economic resources, the claims to those resources, and the changes in them. helpful for making financial decisions helpful in making long-term decisions helpful in improving the performance of the business useful in maintaining records

3. Which profitability models are generally used for forecasting?

Almost all managerial decisions are based on forecasts. Forecasting is defined as the prediction of what will occur in the future, but it is an uncertain process. The selection and implementation of the proper forecast methodology has always been an important planning and control issue for most firms and agencies. Often times, the financial well being of the entire organization operation rely on the accuracy of the forecast since such information will likely be used to make interrelated budgetary and operative decisions in areas of personnel management; purchasingâ019 marketing and advertising, and capital financing. There are basically two main approaches to forecasting - the explanatory method and the extrapolation method - with mainly two categories forecasting quantitative and qualitative. Forecasting models are needed throughout an organization. They are aimed at assisting the decision-makers in their decision-making processes which is never ending. This means that forecasting activity is a cyclical process; starting with effective and efficient planning and ending in compensation of other forecast in their performance.

4. How can you calculate the cash flows of a company?

Definition: The movement of money in and out of a business and the resulting availability of cash.Also Known As: ProformaExamples: Cash flow is calculated by adding net after-tax income plus any bookkeeping expenses that result in items being deducted but not paid out in cash.

If you are starting a new business and writing a business plan, don't worry if the cash flow is negative for several months. It is the cash balance that should not go below zero because that would be the same as having a negative balance in the checking account.

5. Which stocks do you track and why?