Financial Analyst
Top 25 Interview Questions and Answers

Top
1. What do you think you could do better as a financial analyst?
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Best Answer
Try to improve myself as days go by in the field of finance.
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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.
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3.
I can contribute to top and bottom line of the company.
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2. Tell me about a time when you had to inspire people?
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Top Answer
During a time of turnover, I encouraged associates to focus on developmental goals and objectives.
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Second Best
while getting a job.
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3.
For getting a good job from a right place.
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4.
when the result of ca announced
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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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6.
During the The DON Budget we had two weeks to complete my team members was complaining saying there is no way we can complete in two weeks I encourage them to complete and stated that yes we can and we were able to complete as a team and received an outstanding feedback from management.
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7.
I have inspired my classmates in high school and college by simply displaying good workmanship traits during lectures and a competitive spirit inside the classroom. My classmates have imitated my academic style of learning, research, writing, etc.
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3. What are the financial statements?
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Top 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
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Second Best
The financial statements consist of; the income statement, the balance sheet, the statement of retained earnings, cashflow statement and, notes to the account
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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.
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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.
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5.
Income statement, balance sheet, statement of cashflows
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6.
reports on how businesses has performed finacially through the year
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4. Tell me about a time when you were in a disagreement with your teammates?
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Top 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.
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Second Best
When their working procedure calls for company's loss.
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3.
When they do not listen.
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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.
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5.
I used to lock heads with a fellow nurse in the INCU ward. We disagreed over a lot of things Ė from the care of patients to who got what shifts to how to speak with a childís family. Our personalities just didnít 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 werenít getting along. It turns out, it was all about communication. We communicated differently and onc
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6.
Nothing such.
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7.
Tell me about your self.
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8.
Nothing such.
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9.
Took my idea.
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10.
I will convey them in positive way.
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11.
I try to solve the reason of disagreement.
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5. Do you have experience in annual planning processes?
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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.
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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)
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3.
yes i have experience
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4.
Yes, iam involved in monthly budgets regularly.. Also plan for annually on approximaiton.
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6. What frustrates you?
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Best Answer
Getting the job delayed for no reason
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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.
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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.
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4.
What frustrates you?
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7. How do you calculate NPV?
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Top Answer
All future cash Flows (either out or inflow) discounted at WACC.NPV = PV OF INFLOWS - PV OF OUTFLOWS
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Second Best
Cash inflow - Cash outflow = Net cash flowNet Cash flow * Discount factor = PV Cash flowSum of all PV Cash Flow = NPV
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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
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4.
It is discounted cash inflows minus discounted cash outflows
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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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6.
It is the difference between the present value of cash inflows and the present value of cash outflows. NPV = X * [(1 r)^n - 1]/[r * (1 r)^n]
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7.
NPV measures the total amount by which an investment is expected to increase based on the present value of its potential cash flows and initial cost.
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8.
Net Present Value = PV of cash inflows discounted at WACC
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9.
NPV = Present value of cash flows discounted at WACC
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10.
NPV = R1 + R2 + R3 + ... − Initial Investment (1 + i)1 (1 + i)2 (1 + i)3 Where, i is the target rate of return per period; R1 is the net cash inflow during the first period; R2 is the net cash inflow during the second period; R3 is the net cash inflow during the third period, and so on ..
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8. How do you calculate WACC?
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Top Answer
its the overall cost of capital of company. it is the weighted average of component cost of debt and equity .
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Second Best
Weighted Average Cost of Capital - To calculate WACC - [{Equity/(Equity Debt)}*Cost of Equity] [{Debt/(Equity Debt)}*Cost of Debt*(1-Tax rate)]
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3.
cost of Equity * % of Financed Equity cost of Debt * % of Financed Debt * (1 income tax Rate)
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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
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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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6.
find
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7.
it is [(book value debt)/(market value of equity+book value debt)]*(1-tax rt)+(cost of common equity)*(weight of equity)
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8.
dont know
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9.
cbc
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10.
fg
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11.
dont no
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12.
Weighted Average Cost Of Capital (WACC).
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13.
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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14.
Wacc is the overall cost of capital of a firm.1-calculating the cost of specific sources of fund.2-Multiplying the cost of each source with its propertion in capital structure.WACC is K0=K1W1 K2W2 ----------KnWn.where k1 and k2 are component costs and w1w2 are weights.
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15.
debt/value of company, ie debt preferred common equity (called weighting)x present cost of debt obtainable in the market (if known) x (1-Tax) preferred/value of company x cost of preferred equity/ value of company x cost of equity
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16.
WACC = ke(E/D E P) kd(D/D E P) kp(P/D E P where ke = cost of equity, kd = cost of debt, kp = cost of preferred Stock, D = Amount of debt, E = Amount of Equity and P = Amount of preference shares
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17.
By taking the cost of equity and the cost of debt and weighting based on market their values.
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18.
cost of Equity * % of Financed Equity cost of Debt * % of Financed Debt * (1-tax rate)
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19.
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 Businesses often discount cash flows at WACC to determine the Net Present Value (NPV) of a project, using the formula: NPV = Present Value (PV) of the Cash Flows discounted at WACC
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20.
WACC = kd*(1-T)*wd ke*we
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21.
Aggregating income and expenditures.
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22.
WACC is the Weighted Average Cost of Capital.WACC is used in Finance to measure a firm's of cost of capital. Corporate raise money from two sources:1. Equity 2. DebtWACC equation isWACC = E/V * Re D/V * Rd * (1 - Tc)Where:Re : Cost of EquityRd : Cost of DebtE : Market value of the firm's equity.D : Market value of the firm's Debt.E/V : Percentage of financing that is Equity.D/V : Percentage of financing that is Debt. Tc : corporate Tax Rate.
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23.
First a fall we determine the weigh of each capital in the overall capital structure of the firm and then we multiply this weight with the specific cost and make sum of the result obtained.
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24.
(E/V * Re) ((D/V * Rd) * (1-Tc))
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25.
E/V*Re D/V*Rd*(1-Tc)
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9. Are you familiar with creating daily sales reports?
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Best Answer
Yes I am,
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10. What would you say your worst qualities are?
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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.
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2.
Sometime i am unable to concentrate on my work and i don't follow my own strategies that i established.
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3.
My worst qualities are iam not at aware of cuurent affairs,, it is my biggest worest quality.......
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11. Pick one financial concept and explain it to me.
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Top 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.
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Second Best
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.
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3.
dont no
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4.
1. Time value of money 2. Accrual vs cash basis3. Cost of capital. Equity vs debtCopse one and explain
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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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6.
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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7.
Business entity concept: in this concept business is trested as separeatd to owners. it both are different owners and busiess examples are with drawn from persnal use.
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12. What process do you use to create reports?
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Best Answer
i will used ms excel to create report.
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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).
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3.
From book of accounts, there we can have enough data to create report, then use excel for that task.
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4.
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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5.
Executive summary and then IAAR = iNTRODUCTION (PROBLRM IDENTIFICATION), Analysis , Build alternative solution , Recommend the best.
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13. Can you relate some basic business, finance, and economic theories?
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Best Answer
Just like because of dollar to rupee price is increasing that will directly effected the some business which do import and export.
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14. When did you start following the stock market?
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Best Answer
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.
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2.
I am not good with stock market. but i have more knowledge than ordinary people. it is my hobby to invest in stock market
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-33.3%
15. Tell me of a situation where you felt your time could be spent elsewhere?
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Top 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.
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Second Best
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.
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3.
during my graduation i waste my time with the wrong friends
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4.
When i do not have any work to do.
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5.
During my CAT examination i have distributed time in other competitive exams like government jobs.
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6.
Every task in a job is important and all small details build or support a bigger picture. Some tasks are not as exciting and challenging, but I take it as a time to recharge for the more complex tasks.
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-0%
16. Tell me about a time when you presented an oral report on a specific industry or corporation.
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Best Answer
I have presented a report on financial analysis of a Pharmeceutical company- Cipla when
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17. Why do you have an interest in finance?
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Top Answer
Finance is Finance rest all are nonsense ehehehe
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Second Best
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.
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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
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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.
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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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6.
Finance is the backbone of any industry.If the backbone of any industry is not strong then it will not sustain in longterm. so financial analyst is the back bone of a company.i wnat to be the backbone of any industry.
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-57.1%
7.
Basically i am from science background and i want to just remove my keeda from ind=side.
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63%
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8.
Its improve our knowledge.
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9.
It is a domine.
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10.
I love numbers.
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11.
Basically i am from Bcom ihave intersted in finance sector bcs i have more knowledge in finance...
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12.
Its one of the good job.
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33%
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13.
Financial analysis is in my opinion the more interesting area of Accounting. It is forward thinking and is a key instrument to execute a companies objective.
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14.
To be able to determine what impacts revenue.
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15.
I love finance.
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20%
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16.
The Overall objective of the business is wealth maximization of shareholders or owners, and this is possible only the involvement of three main decisions 1) Investment 2) Financing 3) Dividend/Interest, and all are involve the Finance, and this is the reason that I have interest to directly become the part of the objective of the business.
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17.
Because every business needs profit.
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18.
Why interest in insurance.
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-0%
18. Why do you want to leave your current company?
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-55.6%
Best Answer
Completely bored and looking for a new lead$
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50%
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-44.4%
19. Tell me about the financial markets in 2010?
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-53.3%
Top 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.
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-66.7%
Second Best
It was boom market.
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100%
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-50%
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.
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-50%
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.
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100%
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-75%
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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0%
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-0%
6.
Balance sheet.
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0%
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-0%
7.
I have an interest in finance because in this everyone should be aware about the financial world.Not only that but also to gain more knowledge about stock market.How industries are running in order to keep themselves into the peak.
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0%
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-0%
8.
Interest denoted the opportunity cost of the earnings which we will get if we employ the capital we invest into the business into any process.
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9.
I think I possess adequate qualification and experience required for this position. I m positive that my knowledge and skill will further enhance the analytical and reporting structure of this company. Hence, I consider myself a great fit for this position.
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0%
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-0%
10.
I think I possess adequate qualification and experience required for this position. I m positive that my knowledge and skill will further enhance the analytical and reporting structure of this company. Hence, I consider myself a great fit for this position.
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0%
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-0%
20. Looking five years into the future, what does your dream financial analyst position look like?
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-53.3%
Best Answer
Financial manager.
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60%
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-50%
21. What technical skills do you possess to be qualified for this position?
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-53.8%
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.
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33%
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-31.8%
22. Tell me about a time when you were in a group that failed and why it failed.
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-51.4%
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
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67%
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-50%
23. What profitability models do you find most accurate for forecasting?
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-53.9%
24. How do you interpret data concerning investment programs?
+55%
-48.3%
Best Answer
How do you interpret data concerning investment programs.
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50%
+ / -
-40%
25. What software programs have you used for financial analysis?
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-30%
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Financial Analyst
Career Field
Job Satisfaction
Interview Difficulty
Healthcare
Vacation
Hours per Week
Business
80%
Easy
Provided
Two Weeks
50 Hrs/Wk

A financial analyst, securities analyst, research analyst, equity analyst, or investment analyst is a person who performs financial analysis for external or internal clients as a core part of the job.

Source: http://en.wikipedia.org/wiki/Financial_Analyst Last Updated: February 27, 2014, 8:07 pm
Education Requirements

Most positions require a bachelorís degree. A number of fields of study provide appropriate preparation, including accounting, economics, finance, statistics, mathematics, and engineering. For advanced positions, employers often require a masterís in business administration (MBA) or a masterís degree in finance. Knowledge of options pricing, bond valuation, and risk management are important.

Work Environment

Many financial analysts work at large financial institutions based in New York City or other major financial centers. In 2012, about 45 percent of financial analysts worked in finance and insurance industries. They worked primarily for security and commodity brokerages, banks and credit institutions, and insurance carriers. Others worked throughout private industry and for government.

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