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If you could analyze only one type of financial statement for your clients, which financial statement would you choose?

Answer examples and advice for how to answer this interview question for a Financial Analyst interview

How to Answer

The interviewer is looking for your personal preference. Technically is no right or wrong answer; however, be sure to think about the job description. You should recall if there was an expressed preference on the type(s) of financial statements they want you to be well versed in. Once you state your preference, explain why you chose that particular statement over the others.

Choose from the four main types of financial statements:

- Balance Sheets
- Income Statements
- Statement of Cash Flows
- Statement of Changes in Equity

If you could analyze only one type of financial statement for your clients, which financial statement would you choose?
Answer example

"From a logic standpoint, the Statement of Cash Flows makes the most sense if you had to choose just one financial statement type to analyze. The cash flow statement would tell me the ins and outs of cash movement, current liabilities, investments, and operating needs."

View user-submitted Answers

If you could analyze only one type of financial statement for your clients, which financial statement would you choose?
1.
Statement of Financial Position.
2.
I have taken as a base and forecast for the next years.
3.
Profit and Loss Statement.
4.
Profit and loss statement.
5.
Not aware of Financial statement that you are taking about here.
6.
I have only one statement so there is no choice for me to choose any one.
7.
Profit and loss statement.
8.
Profit and Loss - it enables you to look at revenue and if broken down key revenue drivers in the business. As well as this, showing the expenses can help you to forecast accurately based on prior as well as identify areas to reduce expenditure.
9.
I would use the statement of comprehensive income, as this would show both income and expenditure, which can be looked at in more detail.
10.
What is your expectation.
11.
How you create plan transfer?
12.
It would be the income statement. Based on net sales, I can get a good estimate of the size of the company. I can also see whether the company is generating a profit or loss. Also, I can formulate ratios like acid test and net income to sales ratio.
13.
Be accountable and transparent.
14.
Current Financial statement.
15.
I would like to make 1 or 2 more copies and I will keep that as a back up resource.
16.
Balance sheet and income statement.
17.
Income statement and cash flow.
18.
Statement of cash flows. Because it would tell me the operating, investing, and financing needs of the company from the most recent period.
19.
I would choose the Cash flow statement as it provide more meaningful information regarding the financial health of the company by tracking the inflow and outflow of cash as oppose to income statement which may have non-cash expenses such as depreciation that could result in a loss but in reality the company has made profit.
20.
The current financial statement.
21.
Annual Report of the company.
22.
Income statement and other comprehensive income.
23.
I would choose the P&L statement because I am very versed in working with Revenue.
24.
Accounts Payable, Accounts Receivable, reco's, or preperation of MIS.
25.
I will be choosing balance sheet as my financial statement to analysis current liabilities and current assets as well as we can check financial position as on particular day.
26.
By using the CFS, you get the most accurate D and A numbers.
27.
I would choose CFS it explains how the company earned and expended.
28.
Profit and loss Statement.
29.
I would choose balance sheet as it will provide presice overview of all a/c balances.
30.
Cash flow statement.
31.
What processes do you use to create reports?
32.
Cash flow statement because you get a real overview of how the company can manage to pay for it's operations and future growth.
33.
I would like to keep 1or 2 more backup support with me and use original in use.
34.
Its a formal record of financial activities.
35.
Cash Flow Statement.
36.
The best financial statement is the Statement of Cash Flows.
37.
I can choose cash flow statement.
38.
Satement of cash & flows.
39.
Profit and Loss Statement.
40.
Statement of Cash Flows.
41.
I choose which I have that time.
42.
Financial statements only.
43.
Cash flow statement because it has three sections operation, investment & finance. The sections cover accrual cash flow, it shows current liquidity ratios and companies long term investments and also shows how company uses its finance regarding stocks or bonds.
44.
Cash flow statement because it has three sections operation, investment & finance. The sections cover accrual cash flow, it shows current liquidity ratios and companies long term investments and also shows how company uses its finance regarding stocks or bonds.
45.
A Summary of all assets and liabilities.
46.
The one which has been audited. If not, I will choose the FS which shows a true picture.
47.
Income statement. I want to see a period of time of sales.
48.
You have a conflict when there is a difference of opinion. Will find out the cause for the difference and resolve.
49.
Profit and Loss statement.
50.
Statement of Cash Flows. The operations section converts the Income Statement from accrual to cash and will give you some of the information from the Balance Sheet to have an idea regarding the current (and other liquidity) ratios.
51.
Cash Flow Statement because it tells you how readily you can meet company's debt & interest payments. It also states Investors how much cash a company has to generate for future growth.
52.
I would choose cash flow statement as it shows cash inflow and outflow of the business. Its predict the company 's ability to bring more money than to pay out.

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