Finance Mock Interview

Master 32 Finance interview questions covering financial modeling, risk analysis, and valuation.

Question 8 of 32

Tell me how to create a budget?

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Bobbi Witt is an HR Manager and Senior Level Finance and Accounting Consultant. Her experience includes 9 years at a Fortune 500 company where she held a wide range of financial and management accountabilities.

In order to determine the budget , we have to create the, scope baseline, schedule baseline, WBS, activity list, resources calendar, cost baseline including contingency reserve, then management reserves. Understand all the above details is a very important. It's important to the project because after determining the ROM budget, the sponser and stakeholders will decide if they need to this project or not , or shall go for other projects suitable for them.

Bobbi Witt

In my opinion, a good budget is one that has buy in from all departments in the company, is realistic yet strives for achievement, has been risk adjusted to allow for a margin of error, and is tied to the company's overall strategic plan. In order to achieve this, the budget needs to be an iterative process that includes all departments. It can be zero based (starting from scratch each time), or building off the previous year, but it depends on what type of business you're running as to which is better. It's important to have a good budgeting/planning calendar that everyone can follow.

Bobbi Witt

This is a subjective question so take a few seconds to think and gather your thoughts. Showcase your knowledge of what information is needed to create a budget and why you need the information. Answer why the information is relevant. When someone is in an interview, the mind can go blank (d. Think logically on how to answer this question and what are the basic information needed to do a budget. When in doubt use the KIS method (Keep IT Simple) and do not overthink the question. The whole idea of an interview and this type of question will allow the interviewer the ability to to see how the interviewee, reacts to the question and if they can think on their feet. Slow down and think about the answer.

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32Finance Interview Questions & Answers

1.Please tell me how your experience would be a fit for this position? or Based upon the job description, what do you find most exciting about this job opportunity?

2.What is ROI? Give an example of how your past employer measured ROI?

3.What is financial modeling? Do you have experience doing any type of financial modeling? If so, tell me about it?

4.Give me an example of how WACC can be used in a business?

5.Do you find finance and accounting to be similar or different?

Finance Mock Interview

Tell me how to create a budget?

32Finance Interview Questions & Answers

1.Please tell me how your experience would be a fit for this position? or Based upon the job description, what do you find most exciting about this job opportunity?

2.What is ROI? Give an example of how your past employer measured ROI?

3.What is financial modeling? Do you have experience doing any type of financial modeling? If so, tell me about it?

4.Give me an example of how WACC can be used in a business?

5.Do you find finance and accounting to be similar or different?

6.What is your experience level in working with CI or CIP?

7.Walk me through the financial statements?

8.Tell me how to create a budget?

9.What is working capital?

10.Explain what is the most complex work you have done in Excel?

11.What happens on the income statement if inventory goes up by $10? Assuming you paid for it with cash.

12.Have you heard of DCF method? If so, what is it and what does it measure?

13.If a company buys an asset, walk me through the impact on the 3 financial statements? The asset value is $1 million

14.What is a deferred tax asset and what is its purpose?

15.What is goodwill and why do companies use it?

16.What effect would an increase in accounts receivable have on the cash flow statement?

17.If you were the CFO, what would keep you up at night?

18.If there is $20,000 of aged accounts receivable that will be fully written off, what impact will this have on each of the financial statements?

19. What is a Stock Split and Stock Dividend?

20.Is it possible for a company to show positive cash flows but be in grave trouble?

21.How is it possible for a company to show positive net income but go bankrupt?

22.A company purchases new equipment, walk me through the impact on the 3 financial statements.

23.Why are increases in accounts receivable a cash reduction on the cash flow statement?

24.How is the income statement linked to the balance sheet?

25.Have you ever had a conflict with a boss? How was it resolved?

26.Tell me an idea or suggestion you have made that was implemented in the finance area?

27.If I could use only one financial statement to review the overall health of the company, which statement would I use and why?

28.When should a company consider issuing debt instead of equity?

29.Explain to me what Beta is in your own words? Why is it so important?

30.What is the difference between cash base accounting and accrual accounting?

31.What is deferred tax liability and what is its purpose?

32.If you could pick one stock, which would it be and why?