Top 40 Financial Analyst Interview Questions

What are the financial statements?
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Interview Questions and Answers List

1. What are the financial statements?
Best Answer
dese are records of financial activities of a business, person or an entity. basically the Trading and Profit and loss account and balance sheet is called as financial statements of a company
2.
The financial statements consist of; the income statement, the balance sheet, the statement of retained earnings, cashflow statement and, notes to the account
3.
The statements which shows periodic health and performance of the business is known as financial statement,it include Income statement, balance sheet, statement of cashflows.
4.
Financial statements are the Annual report of the company at the end of the financial year,showing balance sheet,which are linked to Income statment and cash flow statements.
5.
Income statement, balance sheet, statement of cashflows
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2. What would you say your worst qualities are?
Best Answer
Never say something which is related to finance or the job you are applying for, say you are bad at sales or something which is not related to the position you are interviewing for.
2.
Sometime i am unable to concentrate on my work and i don't follow my own strategies that i established.
3.
My worst qualities are iam not at aware of cuurent affairs,, it is my biggest worest quality.......
4.
Being friendly with sub-ordinates sometimes may create a problem if they take things a bit casually.
5.
Qualities are never worst.
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3. Tell me about a time when you were in a disagreement with your teammates?
Best Answer
Till date i didn't get in to this kind of situation but if there is any of this then suerly i will try to sort it out with my teammate as without them i will not grow.
2.
When their working procedure calls for company's loss.
3.
When they do not listen.
4.
Business professionals will always have differences of opinion and that is actually a positive thing b/c it yields discussions and thinking outside the box. That could definitely be a formula for growth and quality ideas. Einstein, for example, spent years to prove his relativism theory, while other physicists refuted his findings. That only led to Einstein changing the world of science.
5.
I used to lock heads with a fellow nurse in the INCU ward. We disagreed over a lot of things – from the care of patients to who got what shifts to how to speak with a child’s family. Our personalities just didn’t mesh. After three months of arguing, I pulled her aside and asked her to lunch. At lunch, we talked about our differences and why we weren’t getting along. It turns out, it was all about communication. We communicated differently and onc
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4. Tell me about a time when you had to inspire people?
Best Answer
During a time of turnover, I encouraged associates to focus on developmental goals and objectives.
2.
while getting a job.
3.
For getting a good job from a right place.
4.
when the result of ca announced
5.
During our ERP implementation, my team worked hard and long hours, performing their daily duties and working on the implementation. I had to inspire them to go on and perform at their best.
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5. Tell me about a time when you presented an oral report on a specific industry or corporation.
Best Answer
I have presented a report on financial analysis of a Pharmeceutical company- Cipla when
2.
I have never presented a financial report pertaining to an actual company, however during my man last year it was a requirement for a group to visit a brewery, review their.
3.
Our workshop was running in loss due to non availability of revenue for breakeven. In this time an additional investment in to this location which results an additional depreciation per month is not recommendable.
4.
Did not report about the specific industry in the company but about the function I work in to all the new joiners seniors or juniors.
5.
I just gave a oral report on capital structure of a bank it was well use full to me I just learned how the process of bank take places and I learned about the capital structure of the bank and it was quite use full.
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6. How do you calculate NPV?
Best Answer
All future cash Flows (either out or inflow) discounted at WACC.NPV = PV OF INFLOWS - PV OF OUTFLOWS
2.
Cash inflow - Cash outflow = Net cash flowNet Cash flow * Discount factor = PV Cash flowSum of all PV Cash Flow = NPV
3.
Rt / (1+i)t where Rt = the net cash flow (the amount of cash, inflow minus outflow) at time t. For educational purposes, R0 is commonly placed to the left of the sum to emphasize its role as (minus) the investment., i - the discount rate (the rate of return that could be earned on an investment in the financial markets with similar risk.); the opportunity cost of capital, and t= time
4.
It is discounted cash inflows minus discounted cash outflows
5.
By finding the differences between the present value of future cash inflows and present value of future cash out flows.
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7. Tell me of a situation where you felt your time could be spent elsewhere?
Best Answer
I always feel like I could be doing more important things than when doing small tedious work, but hey it needs to get done and thats why I am here.
2.
Sometimes in the midst of things, we tend to do a lot of hard work than smart work and end up doing a lot of work which essentially could have been avoided.
3.
during my graduation i waste my time with the wrong friends
4.
When i do not have any work to do.
5.
During my CAT examination i have distributed time in other competitive exams like government jobs.
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8. Do you have experience in annual planning processes?
Best Answer
Yes, from last three years, I was continuously the part of annual planning team in my previous employer. We planned about the Product wise sales and the measures to boost up these sales and decide the time, when to launch that scheme. We analyzed the cost of such schemes and Campaign. We also planned about Material Management, when to purchase, either import or local. For imports, what would be the benefit and cost of early purchasing etc.
2.
Annual planning processes are entirely dependent on two factors that are past trend activities and new project. One should know the possible outcomes of the new project and reflect it in the planning reports in a rationale way. pro-active approach is required for coordination between interdepartmental teams to plan the financials accordingly. (Nabeel Qureshi)
3.
Yes, actively participated in budgeting process.
4.
yes i have experience
5.
Yes, iam involved in monthly budgets regularly.. Also plan for annually on approximaiton.
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9. What do you think you could do better as a financial analyst?
Best Answer
Try to improve myself as days go by in the field of finance.
2.
I would rather do my best in guiding the people as to where and when to buy or sell stocks by doing various research.
3.
I can contribute to top and bottom line of the company.
4.
I like to work with numbers and dig into them and see the outcome and how it can help the company make decisions.
5.
I am very new for this so I need a opportunity to learn then I can give my 100% to the job to improve.
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10. What frustrates you?
Best Answer
Getting the job delayed for no reason
2.
Its when the certain task deadline has approched and there are complications which are above my level of expertise, and the person who requires to fix it at that particular stage doesnt care about time management.
3.
When I am in full pace and face any hurdle in my work like power break down, internet or server issue.Secondly, when employer does not fulfill his commitment regarding the employees benefits.
4.
What frustrates you?
5.
Nothing actually frustrate me, when my financial analysis does not go down well, I exploit all technicalities to arrive at convincing analysis.
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11. Looking five years into the future, what does your dream financial analyst position look like?
Best Answer
Financial manager.
2.
To become a qualified management accountant, with greater responsbilities.
3.
I would hope that I have been a strength to the company and that my role has grown and that I have grown as an employee and person.
4.
My position as a financial analyst should be well settled and smooth handle of work I expect.
5.
I would like to be the managre.
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12. When did you start following the stock market?
Best Answer
I started back in 2007 and 2008 when the market was crashing. I heard it on the news and started doing my own research after that.
2.
I first found an interest in the stock market 1 year ago. Before then, I had even bought shares in a prestigious company and I was shocked to see the share price drop after the IPO! That's when I knew that there's more to stocks than the hype that is created. That was not when I took a deep interest in following stocks though. I focused on my interest last year when I enrolled in a business course and learned the language of stock.
3.
I am not good with stock market. but i have more knowledge than ordinary people. it is my hobby to invest in stock market
4.
When I was in college I had a project to follow certain stocks that piqued my interest.
5.
Few months back I started to learn about the stock market and I still do it.
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13. Pick one financial concept and explain it to me.
Best Answer
Cash flow- Cash flow is the single best determining factor that one can use to figure out how a company operates and if it works.
2.
Asset allocation means diversifying your money among different types of investment categories, such as stocks, bonds and cash. The goal is to help reduce risk and enhance returns.
3.
dont no
4.
1. Time value of money 2. Accrual vs cash basis3. Cost of capital. Equity vs debtCopse one and explain
5.
I would like to talk about asset allocation. Its an investment technique which balances risk and diversifies assets by dividing among major categories like bonds, stocks, real estate
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14. How do you calculate WACC?
Best Answer
its the overall cost of capital of company. it is the weighted average of component cost of debt and equity .
2.
Weighted Average Cost of Capital - To calculate WACC - [{Equity/(Equity Debt)}*Cost of Equity] [{Debt/(Equity Debt)}*Cost of Debt*(1-Tax rate)]
3.
cost of Equity * % of Financed Equity cost of Debt * % of Financed Debt * (1 income tax Rate)
4.
Where: Re = cost of equity Rd = cost of debt E = market value of the firm's equity D = market value of the firm's debt V = E + D E/V = percentage of financing that is equity D/V = percentage of financing that is debt Tc = corporate tax rate
5.
A companies assets are financed by either debt or equity. Therefore WACC is the min. expected return in order to satisfy the creditors and investors. WACC = E/V * Re D/V * Rd * (1-TC)where Re = Cost of equityRd = Cost of debt.E = Mkt. value of firm's equityD = Mkt. value of firm's debt.V = E DE/V = % of financing, i.e. equityD/V = % of financing, i.e. debtTC = Corp. tax rate.
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15. Are you familiar with creating daily sales reports?
Best Answer
Yes I am,
2.
Yes, I currently sell jobs and must create a daily sales report to know what we have to do and where we need to be.
3.
Yes, evryday I have create the invoices and the send bills to the customers with proper document.
4.
Not completely but if I get opportunity to learn I make sure I give my best in making reports.
5.
Yus at easy execl level data.
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16. Walk me through the decision process of ranking projects?
Best Answer
Choose the project which has the best NPV.
2.
Most percentage margin maker will ne in best rank.
3.
There are many ways that one can ranks a project, you could rank based on payback periods.
4.
The projects are ranked based economic benefit provide to the organisation. The first rank for the project which is more profitable/reduce cost.
5.
1) Analyse Cost of Financing the Project, Overhead costs and ROI 2)Verify NPV and WACC
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17. What technical skills do you possess to be qualified for this position?
Best Answer
I have sound knowledge in financial concepts and its implications, Also I have proficiency in MS- office suites, especially Excel & Access. As we use Excel the most for reports, technically i guess its the best qualification you would look for in a candidate.
2.
I have good analytically skills, good overall skill management accounts both from the educational training and from working experience. I am also competent in all MS excel to advance level.
3.
Most turbulent period in the history of Financial market.US stock market crash.
4.
Strong accounting knowledge and sound on Excel.
5.
I am good at grasping financial concepts and have necessary skills to implement it in the form of reports.
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18. Why do you want to leave your current company?
Best Answer
After completing 6 successful years in the organisation I wish to come out of my comfort zone and learn more and new things and face a challenging environment.
2.
Completely bored and looking for a new lead$
3.
I would like to workin MNC company, before I didnt get opportunity.
4.
Now im a graduate student and the pay what I was getting in my past company was no so efficient for my and it was not so a learning environment so I decided to quite and look for the best companies like yours.
5.
Since the present job occupies more of my time in preparing basic reports, which can be cut down through other intermediary products.
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19. Tell me about the financial markets in 2010?
Best Answer
The WACC is the minimum return that a company must earn on an existing asset base to satisfy its creditors, owners, and other providers of capital, or they will invest elsewhere n general, the WACC can be calculated with the following formula[2]:where N is the number of sources of capital (securities, types of liabilities); ri is the required rate of return for security i; MVi is the market value of all outstanding securities i.
2.
It was boom market.
3.
Sometimes we end up doing hard work rather than smart work. Thats when time gets wasted. I would want to be the smart ones around.
4.
Finance is the key for running any business from planning stage to performance stage. I would like myself to be one among the best finance persons in the industry.
5.
First of all find out cash inflow after that discounting it by discounted factor. whatever value we got is present value tnan deduct investment frm it.
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20. Provide me an example of how your honesty and integrity led to a positive outcome?
Best Answer
When I was an RA in the freshman dorm, I was very honest with my residents and kept my role very consistent for the whole year. This led to high expectations for the community I was trying to build. It only worked because of how I presented myself, and how I held myself accountable.
2.
People like to deal with someone who is honest and full of integrity because it allows them to build a sense of trust with that person. As a financial analyst, trust is crucial because they are trusting you to provide them with accurate information to make a decision.
3.
Once I reported the same number twice for the consecutive months though nobody realized but submitted again the revised version accepting the mistake.
4.
I have maintained petty cash in current company, there is no issue while auditing.
5.
Inspiration effect on others to have contribution with maximum effecient work.
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21. Why do you have an interest in finance?
Best Answer
Finance is Finance rest all are nonsense ehehehe
2.
I enjoy finance because it is a very challenging field, and core aspect of the business. It has been a passion of mine for as long as I can remember. I personally believe that finance is a very rewarding field to build a career in.
3.
finance is the core thing in any industry, to set targets budgets and planning for using them is done by finance and i want myself to be the best finance person as life around finanacing
4.
Finance is my passion ever since childhood. Finance is the key ingredient to all industries, right from planning to performance. So I would like to be one among the key factors contributing to success of any industry.
5.
Finance is related to fund and their allocation. without it a corporates can't expect a progress from begining till end.
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22. Tell me about a time when you were in a group that failed and why it failed.
Best Answer
This is Ramanjaneyulu, working as a research analyst since 2006. my work is relating to anasysis of Debt, Preferred and Equity analysis. we are providng separate data set for debt , preferred & equity of entity.To capturing each and every componet of debt credit facilities, letter of credit interest rate, maturity, with recore. For preferred shares are redeemable or not, cummlative or not participating any further profits and voting rights. comin
2.
Like to talk about the BS program. Planning, no rush, last minute addition.
3.
The top management favour in other group.
4.
During school I did a number of group projects and o noticed a trend all of the successful groups I was in had committed people, maybe not the most intelligent but we all shared and pursued a common goal.
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23. Can you relate some basic business, finance, and economic theories?
Best Answer
Just like because of dollar to rupee price is increasing that will directly effected the some business which do import and export.
2.
Demand rises for USD, and Rupee depreciates against USD.
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24. What profitability models do you find most accurate for forecasting?
Best Answer
It depends on your nature of operation and past years results. When we analyze together we gets a reliable result.
2.
I would use profitability models such as graphs and data.
3.
Financial and trend based model to capture the finances in case of changing environment and also for certain areas where it is difficult to forecast trend will provide a better insight.
4.
Healthy working capital.
5.
Case to case basis- Historical A stable market and financial results that are changing slowly and predictably lets me use historical data to forecast profitability. Financials We can calculate interest charges or increasing material costs and add them to expenditures while projecting increasing revenue due to higher sales. Trends and Analytical model.
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25. What process do you use to create reports?
Best Answer
I always prefer excel to create Financial Analysis reports. Also I will see how your previous reports were published and customise the the new report accordingly.
2.
First i will see the previous yours reportthen i will what document he require for creating that reportafter that i will gather all that documentthen i will create a layout and fill the data into that layout and show to my seniors if they agree than i will do other stuff like formatting (proper font, space, etc).
3.
i will used ms excel to create report.
4.
From book of accounts, there we can have enough data to create report, then use excel for that task.
5.
What type of report recruiters want according to the demand of recruiters there is different reporting tools like ms excel, spss, etc we will generate the report.
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26. How do you interpret data concerning investment programs?
Best Answer
How do you interpret data concerning investment programs.
2.
I would look at the data for a specific time range to determine where it has been and where it is heading.
3.
I am sorry I need to learn about this.
4.
WIth experience and due deligence.
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27. What was the most complex assignment you've had? What was your role?
Best Answer
I was new to a training and development team that was in the process of documenting business operational procedures for conversion to a new SAP system. I was assigned to create a presentation on the benefits of converting to the new system for the deployment Director. I was given little information on what the Director actually wanted and minimal direction on who to contact to capture details on the system. Action:I created an outline of what.
2.
I was new to a training and development team that was in the process of documenting business operational procedures for conversion to a new SAP system. I was assigned to create a presentation on the benefits of converting to the new system for the deployment Director. I was given little information on what the Director actually wanted and minimal direction on who to contact to capture details on the system. Action:I created an outline of what.
3.
I was new to a training and development team that was in the process of documenting business operational procedures for conversion to a new SAP system. I was assigned to create a presentation on the benefits of converting to the new system for the deployment Director. I was given little information on what the Director actually wanted and minimal direction on who to contact to capture details on the system. Action:I created an outline of what
4.
Research assignment for new market. I was analysing them. GEtting data itself was challenge for new market to enter altogether.
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28. What software programs have you used for financial analysis?
Best Answer
I have used both Microsoft Excel and SAS for coding. I have more experience using the excel system.
2.
In the past I have used Peachtree and I am currently using QuickBooks. I am always willing to learn a new software package.
3.
I think using Microsoft Excel coupled with Microsoft Access. They allow you to sort or create reports, which aids in looking for trends.
4.
As I said im very new I need to learn about this.
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29. Name one current financial figure released recently. How did that impact the market?
Best Answer
Cyprus would sell its gold reserves amid country facing lot of debts ........it has lead to drop in the gold prices in various countries.
2.
Acquisition of I gate by capgemini has stengthened its position in US market.
3.
HCL Tech Q4 net slips 2.8% to Rs 1,783 crore, shares fall.
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30. What are your thoughts on the recent mortgage crisis?
Best Answer
Its sucks..... it sucks the big one.
2.
more u lend liniently earlier you will be bankrupt
3.
It has happened because of the gross negligence of the financial institutions and regulatory bodies, it could have been avoided.
4.
Aggressive financing, high speculations, Faulty Appraisals.
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31. How do you see Greece's economy unfolding in the next few years due to their recent financial crisis?
Best Answer
If the political scenario in greece get stabilized with the structural reforms there is possibility of coming out of the crisis after the bail out is provided otherwise it seems difficult at the moment.
2.
Its gonna go further down due to heavily imposed taxes etc. Investors may loose likings to go there.
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32. In your spare time, what magazines, newspapers, journals, do you read?
Best Answer
Investopedia. It give complete glossary about finance.
2.
Investopedia which has very useful information about finance topics.
3.
Times of india.
4.
I read business times of different news paper to understand the current economic trend and money market trent.
5.
In my spare time, I like to read articles on how to make myself more efficient. And I spend time reading the bible.
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33. Give an example of when you had multiple projects due with a limited amount of time available. How did you budget your time between the two projects?
Best Answer
At the end of every semester there are finals and final projects. I typically just made sure that I took care of what needed to get done first. Based on due date, I would work on that respective project first. Another thing that was important was the difficulty or most important task to complete. I would make sure to leave enough time to get everything done.
2.
I would determine how long each project will take me and break them up into manageable pieces in an effort to get each project done by the deadline.
3.
I first tried to prioritize the projects followed by the ground work or help needed to finish the basic task delegation and than focus on completing things.
4.
Prioritize the work and time management.
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34. Describe the attribute you possess that will make you successful in this position?
Best Answer
1Fit Both Physically and Mentally . 2 Approach Their Work as a Career Rather than as a Job. 3 Dedicated to Excellence 4Has Written Goals and is Focused on Their Achievement. 5Demonstrates a Positive Attitude Everyday.
2.
I see my current experience with budgeting and planning as a valuable skill set that I can immediately put to good use in this position.
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35. What other factors should you consider besides NPV when selecting a project?
Best Answer
benefit cost ratio is another option
2.
We consider the project at more than npv.
3.
Period of project, incoming fund flow and cash out flow, market condition, work certification procedure and payment period, client reputation, forex flatuation chances, etc.
4.
Detailed study about the project.
5.
ROI, IRR, Cost benefit analysis and ratio .
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36. What is the difference between an investor and a shareholder?
Best Answer
All Shareholders are investors but all investors are not shareholders:hence, holding share is one of the means to invest. Whereas investor refers to debenture holders as well as shareholders. If you are asking about the difference between shareholders and debenture holders,1)Debenture holders earns int from their investment whereas shareholders get shares on profit2)Debenture holders gets 1st priority in case when co is liquidated
2.
An investor is one who can only invest in varios portfolios whereas the shareholder can not only buy or sell the shares but he is also the owner of that company.
3.
A shareholder is an investor....an investor is not a shareholder. An investor can hold many other assets besides shares.
4.
Investor invests and shareholders has their share.
5.
Investor invests for better returns than prevailing market rate, Shareholder owns the business.
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37. How does A/R and inventory fluctuations affect the income statement?
Best Answer
he A/R affects the income statement only if A/R increases, thereby also increasing revenue. Collections on A/R do not affect the Income statement, but does affect the balance sheet increasing cash and decreasing A/R. Inventory effects the Income Statement through the cost of goods sold calculation. Your beginning inventory minus ending inventory equals your cost of goods sold, which is subtracted from Revenue to arrive at gross margin.
2.
Accounts receivable is money payable for goods or services that have not yet been used. When this fluctuates either there is new income or new expenses.
3.
While buy the material from the customers, the credit period is 30 days & 60days, p&l hows affects.
4.
A/R & inventory fluctuation affect the income statement by either increasing or decreasing Sales & cogs on the income statement having larger amounts of A/R recorded increases both sales and COGS on the income statements.
5.
Accounts Receivable Impact Since accounts receivable and inventory are balance sheet items, they do not directly affect your company’s income statement. Fluctuations or changes in these two current assets always appear on the balance sheet and on the cash flow statement. Revenues on the income statement show up as A/Rs or cash on the balance sheet and cash flow statement. The payment of A/Rs by customers converts A/Rs to cash, which in no way impacts the income statement. Inventory Impact As your company sells products, it reflects its inventory costs in the cost of goods sold line item on the income statement. Therefore, any fluctuations or modifications to the cost basis of that inventory will impact the income statement via the cost of goods sold. However, as with A/Rs, the cost of goods sold on the income statement already reflects inventory valuations on the balance sheet, so inventory-level fluctuations do not affect the income statement.
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38. If you could have only one financial statement, which one would you choose?
Best Answer
Cash Flow Statement
2.
Cash flow statement.
3.
I would choose balance sheet as it will provide presice overview of all a/c balances
4.
By using the CFS, you get the most accurate D and A numbers.
5.
Statement of Cash Flows.
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39. Give me a time when you influenced management to change an important decision?
Best Answer
Management was looking to make a change in the company they were using for their uniforms. Upon analyzing the new potential contract it was going to cost us more in the long run by changing companies so they decided to stay with the current uniform company.
2.
Making pricing decision for one of molecules we sale. They overpriced it, I concentrated on Contribution level.
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40. How would you handle a conflict with a colleague or supervisor?
Best Answer
http://www.wikihow.com/Resolve-a-Conflict-at-Work
2.
I will try to explain the situation and solve the problem smoothly.
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