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Finance Technical Questions

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497 questions · 10 free to try
497 questions
A company announces a $100 million share buyback programme. Walk me through how this affects the three financial statements.Members
A company buys back $50m of its own stock and immediately retires the shares. Walk me through the three statements.Members
A company changes its inventory method from FIFO to LIFO during a period of rising prices. Walk me through the impact.Members
A company collects $20m in cash from a customer in advance for services to be delivered next quarter. Walk me through the three statements.Members
A company determines that a piece of PP&E with a carrying value of $80 million has a fair value of $50 million. Walk me through the impairment.Members
A company forgives $20m of accounts receivable owed by a struggling customer. Walk me through the three statements.Members
A company has 100m basic shares outstanding, 8m stock options outstanding with weighted average strike price of $20, and current share price of $40. Using the treasury stock method, calculate diluted shares outstanding in millions.Members
A company has EBIT of $200m, tax rate of 25%, total debt of $500m, and book equity of $1,000m. Calculate ROIC (using debt + equity as invested capital). Enter as a percent to nearest whole number.Members
A company has net income of $100m and weighted-average basic shares outstanding of 50m. It has 5m options outstanding (exercise price $40, current market price $50), 2m RSUs outstanding, and convertible bonds with $300m face value, 4% coupon, conversion ratio of 25 shares per $1,000 face. Tax rate is 25%. Calculate diluted EPS to two decimal places. Enter as a decimal (e.g. 3.50).Members
A company has net income of $200m, weighted-average basic shares outstanding of 50m, and paid $10m of preferred dividends during the period. Calculate basic EPS to two decimal places. Enter as a decimal (e.g. 6.51).Members
A company has net income of $416m and basic shares outstanding of 100m. It has 8m stock options outstanding with weighted average strike price of $40 and the current share price is $80. Calculate diluted EPS in dollars per share (to two decimal places).Members
A company has net income of $50m, D&A of $15m, an increase in accounts receivable of $5m, a decrease in inventory of $3m, an increase in accounts payable of $2m, and stock-based compensation of $4m. Calculate cash from operating activities in $m. Enter as a decimal (e.g. 119.1).Members
A company has revenue of $400m, COGS of $250m, accounts receivable of $80m, inventory of $50m, and accounts payable of $30m. Calculate the cash conversion cycle in days. Enter as a decimal to one decimal place (e.g. 189.1).Members
A company has the following balances: cash $20m, accounts receivable $30m, inventory $25m, accounts payable $15m, accrued expenses $10m, short-term debt $5m. Calculate net operating working capital (excluding cash and short-term debt) in $m. Enter as a decimal (e.g. 24.1).Members
A company issues $50 million of debt at par. Walk me through the three statements.Members
A company issues $50m of preferred stock at par. Walk me through the three statements.Members
A company issues 1m new RSUs to employees with a 4-year cliff vesting and current share price of $50. Walk me through the year 1 financial impact.Members
A company prepays $12 million of rent for the next 12 months. Walk me through the impact on the statements at the time of payment and after one month.Members
A company purchases $50m of inventory on credit. Walk me through the three statements.Members
A company recognises a $50m impairment of goodwill. Walk me through the impact on the three statements.Members
A company refinances $100m of debt at a lower interest rate. Walk me through the three statements.Members
A company reports income tax expense of $30m in its income statement. During the period, deferred tax liabilities increased by $5m and deferred tax assets decreased by $3m. Calculate cash taxes paid in $m. Enter as a decimal (e.g. 30.7).Members
A company sells equipment for $30m. The original cost was $40m and accumulated depreciation is $25m. Walk me through the three statements.Members
A company spins off a subsidiary worth $100m via tax-free distribution to shareholders. Walk me through the impact on the three statements.Members
A company writes down $15m of inventory due to obsolescence. Walk me through the three statements.Members
A company writes off a $5m bad debt receivable. Walk me through the three statements.Members
Acquirer Co. buys Target Co. for $500m cash. Target's book value of net assets is $250m. Fair value adjustments increase identifiable assets by $50m (PP&E write-up). How much goodwill is created? Enter in $m.Members
Explain the difference between accrual accounting and cash basis accounting. Why do analysts care?Members
Explain the difference between basic and diluted EPS. How does the treasury stock method work?Members
Explain the difference between capitalising and expensing a cost. Why does it matter for analysis?Members
Explain working capital and why changes in working capital matter for cash flow analysis.Members
How do you account for in-process research and development (IPR&D) acquired in an M&A transaction?Members
How do you account for software development costs? When can they be capitalised?Members
How do you calculate free cash flow from the income statement? What are the different definitions?Members
How do you read an audit report? What do the different auditor opinions mean?Members
How does stock-based compensation (SBC) affect the financial statements?Members
Walk me through how a $10 increase in depreciation expense flows through all three financial statements. Assume a 25% tax rate.Members
Walk me through how a $10 increase in depreciation flows through the three financial statements.Members
Walk me through how a $10 inventory write-down affects all three financial statements. Assume a 25% tax rate.Members
Walk me through how pension accounting works. What's the difference between defined benefit and defined contribution plans?Members
Walk me through the cash flow statement. What goes in each of the three sections?Members
Walk me through the impact of an inventory write-down of $5 million.Members
Walk me through the income statement from revenue down to net income.Members
Walk me through the treasury stock method for computing diluted shares outstanding.Members
What are the three financial statements and what does each one tell you?Members
What is a deferred tax asset?Members
What is a Variable Interest Entity (VIE) and how is it consolidated?Members
What is accrual accounting and how does it differ from cash accounting?Members
What is an Asset Retirement Obligation (ARO)?Members
What is bill-and-hold revenue recognition? When does it apply and what are the criteria?Members
What is comprehensive income and how does it differ from net income?Members
What is deferred revenue? Give an example and walk through the accounting.Members
What is EBITDA and how does it differ from EBIT?Members
What is fair value measurement under ASC 820? Explain the three-level hierarchy.Members
What is fair value under ASC 820? Walk through the fair value hierarchy (Level 1, 2, 3).Members
What is goodwill and how is it created?Members
What is goodwill push-down accounting and when is it elected?Members
What is goodwill? How is it created and how is it tested for impairment?Members
What is hedge accounting? Walk through the basic mechanics and types of hedges.Members
What is non-controlling interest (NCI) and how is it presented on the balance sheet and income statement?Members
What is OCI (other comprehensive income) and what kinds of items flow through it?Members
What is segment reporting under ASC 280? What information should analysts focus on?Members
What is stock-based compensation and how does it flow through the financial statements?Members
What is the allowance for doubtful accounts, and how does a $3 million increase in the provision affect the statements?Members
What is the cash conversion cycle and what does it measure?Members
What is the difference between an intangible asset and goodwill?Members
What is the difference between an operating lease and a finance lease under ASC 842?Members
What is the difference between current and non-current liabilities?Members
What is the difference between gross profit, operating profit, and net income?Members
What is the difference between LIFO and FIFO? How does it affect financial analysis?Members
What is the difference between the direct and indirect methods of preparing the cash flow statement?Members
What is the matching principle?Members
What is treasury stock and how is it accounted for?Members
What is working capital and what does negative working capital tell you about a business?Members
What's the difference between accrual accounting and cash accounting? Why do most companies use accrual?Members
What's the difference between capitalising and expensing? When do you capitalise an expense?Members
What's the difference between operating income, EBITDA, and net income?Members
A company has pre-tax income of $200m. Federal tax expense is $42m, state tax expense is $8m, foreign tax expense is $4m, and there is a one-time $5m tax benefit from a settlement. Calculate the effective tax rate as a percentage to one decimal place. Enter as a decimal (e.g. 39.6).Members
A company reports pre-tax income of $200m and total tax expense of $40m, including a one-time $10m tax benefit from a settlement. Calculate the sustainable effective tax rate as a percentage to one decimal place (the rate excluding the one-time benefit). Enter as a decimal (e.g. 17.0).Members
A reporting unit has carrying value of $500m (including $150m of allocated goodwill). The fair value of the reporting unit is estimated at $440m. Under the post-2017 single-step ASC 350 test (ASU 2017-04), calculate the goodwill impairment in $m. Enter as a decimal (e.g. 99.4).Members
Explain how foreign currency translation works under ASC 830.Members
Explain how stock-based compensation expense is calculated. What method is used to value options?Members
How do non-goodwill asset impairments work under ASC 360? When are companies required to test for impairment, and what's the recoverability test?Members
How do you account for a discontinued operation under ASC 205?Members
How do you account for a loss-making contract under ASC 606?Members
How do you account for a stock option modification or acceleration?Members
How do you account for contingent consideration (an earnout) in an M&A deal?Members
How do you account for finite-lived versus indefinite-lived intangible assets? What's the impairment testing methodology for each?Members
How do you account for goodwill impairment under ASC 350? What changed with ASU 2017-04?Members
How do you account for joint ventures? Walk me through the equity method, proportional consolidation, and full consolidation alternatives.Members
How do you account for revenue from SaaS subscription contracts under ASC 606?Members
How do you analyse a proxy statement? What should investors look for?Members
How do you handle going-concern qualifications? When does an auditor issue this and what are the implications?Members
How do you handle revenue recognition for multi-element arrangements under ASC 606 (e.g., bundled hardware plus software plus services)?Members
How do you handle the gross versus net revenue presentation question under ASC 606?Members
How does a company account for restructuring charges? When are they recognised, and why do they warrant scrutiny?Members
How does a sale-leaseback transaction work? What is the accounting treatment?Members
How does ASC 815 treat embedded derivatives? When must they be bifurcated?Members
How does ASU 2020-06 change accounting for convertible debt?Members
How does convertible debt accounting work? Walk through the impact on financial statements.Members
How does goodwill impairment testing work? When are companies required to test, and what are the analytical implications?Members
How does segment reporting under ASC 280 work? When are operating segments separately reported?Members
How does stock-based compensation affect dilution and how should analysts adjust for it?Members
Walk me through ASC 842 lease accounting. What changed from the previous standard and how do operating leases now appear on financial statements?Members
Walk me through goodwill impairment testing under IFRS (IAS 36) versus US GAAP (ASC 350). What are the main differences?Members
Walk me through how a company accounts for hedge accounting under ASC 815.Members
Walk me through how purchase price allocation works in an acquisition.Members
Walk me through how to account for a securitisation transaction.Members
Walk me through how you account for an acquisition's purchase price allocation step by step.Members
Walk me through the differences between cash flow hedge, fair value hedge, and net investment hedge accounting.Members
Walk me through the five-step revenue recognition framework under ASC 606.Members
What are deferred tax assets and deferred tax liabilities? Give examples of each.Members
What are discontinued operations? How are they presented on the financial statements and why does it matter for analysis?Members
What are intangible assets and how are they amortised? Explain the difference between definite-lived and indefinite-lived intangibles.Members
What are off-balance-sheet items? How do you identify and analyse them?Members
What are the major differences between US GAAP and IFRS? When does it matter for analysts?Members
What does "going concern" mean? When do auditors flag going concern doubt and what does it signal?Members
What is held-for-sale classification under ASC 205-20? What are the criteria and balance sheet implications?Members
What is push-down accounting and when does it apply? How does it affect the acquired company's financial statements?Members
What is the difference between equity method, cost method, and consolidation? When do you use each?Members
What is the difference between PBO, ABO, and VBO for pension plans? What does each measure?Members
What's the difference between LIFO and FIFO inventory accounting? Why does it matter?Members
When does a parent company consolidate a subsidiary versus use the equity method? What's the difference?Members
A company does a $200M acquisition for cash. The target has $50M of net identifiable assets. Walk through the accounting.Members
A company emerges from bankruptcy with $500m of NOL carryforwards. After emergence (a Section 382 ownership change), the annual NOL utilisation limit is set at $20m per year (long-term tax-exempt rate of 4% applied to the $500m equity value at emergence). In year 1 post-emergence, the company has $80m of pre-tax income. Calculate the cash federal tax expense at a 25% rate (ignore state taxes and other adjustments) in $m. Enter as a decimal (e.g. 30.1).Members
A company has operating leases under ASC 842. Walk me through how lease accounting works and why it matters.Members
Explain how percentage-of-completion accounting works for long-term contracts. What are the risks?Members
Explain the basics of hedge accounting under ASC 815 and why companies elect it.Members
How can management manipulate reserves and provisions to manage earnings, and what should analysts look for?Members
How do deferred tax assets and deferred tax liabilities arise, and when should an analyst be concerned about the valuation allowance?Members
How do pension obligations affect a company's financial statements and valuation?Members
How do you analyse a company with significant intangible assets? How do you assess whether the carrying values are sustainable?Members
How do you analyse a company's internal controls for material weaknesses (SOX 404 compliance)?Members
How do you handle changes in accounting policies and what disclosures are required?Members
How do you read a multi-segment company's financials when segment definitions have changed mid-year? What are the analytical implications?Members
How does ASC 842 affect leverage ratios and what adjustments should analysts make?Members
How would you spot earnings management at a public company? What forensic accounting techniques would you use?Members
Walk me through how to spot aggressive capitalisation of expenses. What are the red flags?Members
Walk me through how to spot aggressive revenue recognition in a high-growth company.Members
Walk me through the accounting for a sale-leaseback transaction and explain when it qualifies as a sale under ASC 842.Members
What are variable interest entities, and why are they important for analysts?Members
What is the difference between a step-acquisition and a normal acquisition? How does the accounting differ?Members
What makes revenue high quality versus low quality? How would you assess the quality of a company's revenue?Members
What's the difference between net income and comprehensive income? Walk through the items that go through other comprehensive income (OCI) and why they're treated separately.Members
What's the difference between operating leases and finance leases under ASC 842 in detail? Walk through the classification criteria and the analytical implications.Members
When should a company consolidate a subsidiary versus use the equity method? How does this distinction affect financial analysis?Members
A company has $400m of equity (market value), $200m of debt (market value), pre-tax cost of debt 5%, cost of equity 10%, and a 25% tax rate. Calculate WACC as a percentage to one decimal place. Enter as a decimal (e.g. 4.4).Members
A company has a net income margin of 5%, asset turnover of 2.0, and equity multiplier of 1.5. Calculate ROE as a percentage to one decimal place. Enter as a decimal (e.g. 28.4).Members
A company has enterprise value of $1,200m, total debt of $400m, cash of $100m, minority interest of $50m, and preferred stock of $30m. Calculate the equity value in $m.Members
A company has equity market cap of $1,200m, total debt of $400m, cash and equivalents of $150m, minority interest of $50m, and preferred stock of $30m. Calculate enterprise value in $m. Enter as a decimal (e.g. 1774.0).Members
A company has year-5 (final forecast year) free cash flow of $70m. WACC is 10% and the long-term perpetual growth rate is 3%. Calculate terminal value at the end of year 5 using the Gordon growth method, in $m.Members
A company trades at $50 per share with trailing EPS of $4 (P/E of 12.5x). If earnings grow 10% next year and the P/E multiple expands to 15x, calculate the new stock price in dollars.Members
A company trades at 15x EV/EBITDA while its peer group trades at 12x. What could explain the premium?Members
A company trades at a P/E of 20x and is expected to grow EPS at 25% per year over the next 3 years. Calculate the PEG ratio to two decimal places. Enter as a decimal (e.g. 1.70).Members
A REIT property generates net operating income (NOI) of $8m per year. The property is valued at $100m. Calculate the cap rate as a percentage to one decimal place. Enter as a decimal (e.g. 10.5).Members
A target company has revenue of $500m and EBITDA margin of 20%. The peer median EV/EBITDA multiple is 12x. Calculate the implied enterprise value in $m.Members
An acquirer offers $80 per share for a target. The target's unaffected stock price (30 days before deal rumour) was $60. Calculate the implied bid premium as a percentage to one decimal place. Enter as a decimal (e.g. 71.6).Members
An analyst uses an exit multiple of 10x EBITDA in year 5. Year 5 EBITDA is $200m, year 5 free cash flow is $130m, and WACC is 10%. Calculate the implied perpetual growth rate as a percentage to one decimal place. Assume year 6 FCF approximately equals year 5 FCF for the calculation. Enter as a decimal (e.g. 1.6).Members
An insurance company has net asset value (NAV) of $5bn, value of in-force business (VIF) of $3bn, and minority interest of $200m. Calculate embedded value attributable to shareholders in $bn (assume VIF is fully attributable to the parent). Enter as a decimal (e.g. 4.4).Members
An office building generates net operating income (NOI) of $5m annually. The market cap rate for similar properties is 5%. Calculate the implied property value in $m.Members
How do you adjust EBITDA for one-time items when computing valuation multiples?Members
How do you calculate enterprise value? Walk me through every component.Members
How do you calculate WACC? Walk through each component.Members
How do you calibrate a discount rate for a private equity investment?Members
How do you compute the implied premium in an M&A bid?Members
How do you determine the appropriate exit multiple for a DCF?Members
How do you estimate the equity risk premium, and why does it matter in valuation?Members
How do you handle outliers in a comparable companies analysis?Members
How do you select a peer group for trading comparables analysis? What criteria matter most?Members
How do you select an appropriate peer group for a comparable company analysis?Members
How do you value real estate? Walk through cap rates, NAV, and the key concepts.Members
How does inflation affect valuation? Walk through the impact on cash flows, discount rates, and multiples.Members
Walk me through a DCF.Members
Walk me through a DCF. What are the key assumptions?Members
Walk me through CAPM. How do you calculate cost of equity?Members
Walk me through how to value a company using a DCF.Members
Walk me through how to value a pre-IPO company.Members
Walk me through the DuPont decomposition of ROE.Members
What are FFO and AFFO and why do REITs use them instead of net income?Members
What are the main valuation methodologies, and when would you use each one?Members
What are the three main valuation methodologies and when do you use each?Members
What is a control premium?Members
What is a football field chart, and how do you construct and interpret one?Members
What is a precedent transaction analysis and what does it tell you?Members
What is a residual income model and when does it apply?Members
What is a stub period in DCF and why does it matter?Members
What is embedded value for insurance companies?Members
What is enterprise value?Members
What is EVA (Economic Value Added) and MVA (Market Value Added)?Members
What is free cash flow yield? Why is it useful and how does it compare to other valuation metrics?Members
What is intrinsic value and how does it differ from market value?Members
What is NAV per share and when is it useful for valuation?Members
What is normalised earnings? When and why do analysts use through-cycle versus current-period earnings?Members
What is terminal value and why does it matter so much in a DCF?Members
What is the cost of equity and how is it estimated?Members
What is the difference between a company's WACC and the cost of capital for a specific project?Members
What is the difference between asset beta and equity beta?Members
What is the difference between equity value and enterprise value?Members
What is the difference between equity value and enterprise value? When do you use each?Members
What is the difference between EV/EBITDA and P/E? When would you use each?Members
What is the difference between FCFF and FCFE? Which one do you discount and why?Members
What is the difference between forward P/E and trailing P/E?Members
What is the difference between LTM and FY1 multiples? How do you decide which to use?Members
What is the dividend discount model (DDM)?Members
What is the dividend discount model (DDM)? When is it useful and what are its limitations?Members
What is the equity risk premium and how is it estimated?Members
What is the PEG ratio and when does it apply?Members
What is the rule of 40 in SaaS valuation?Members
What is total shareholder yield (TSR) and how does it differ from dividend yield?Members
What is WACC and why is it used as a discount rate?Members
What's the difference between book value and market value of equity? What does the price-to-book (P/B) ratio tell you?Members
What's the difference between enterprise value and equity value? How do you bridge between them?Members
What's the difference between levered and unlevered free cash flow? When do you use each in valuation?Members
What's the relationship between ROIC, growth, and valuation? Why does it matter that ROIC exceeds WACC?Members
When is EV/Sales the right multiple to use, and what are its limitations?Members
When would you use EV/EBITDA versus P/E? What are the limitations of each?Members
When would you use EV/Revenue versus EV/EBITDA? What does each capture?Members
When you run a DCF, trading comps, and precedent transactions on the same company, the methods often produce different values. Why? Which is typically highest?Members
A company has an unlevered (asset) beta of 0.8. Its capital structure is 60% equity and 40% debt by market value. Tax rate is 25%. Calculate the equity (levered) beta to two decimal places. Enter as a decimal (e.g. 1.88).Members
A DCF terminal year (year 5) projects EBITDA of $100m and FCF of $60m. WACC is 9% and terminal growth is 3%. Calculate the implied terminal EV/EBITDA exit multiple to one decimal place. Enter as a decimal (e.g. 5.9).Members
A pharmaceutical company has a drug in Phase 3 trials. How do you value it?Members
A regulated utility has $4bn of operating profit (NOI). The market applies a 7.5% cap rate to value the operating business. Calculate the implied enterprise value in $bn. Enter as a decimal (e.g. 102.6).Members
A sponsor invests $100m of equity in an LBO. After 5 years, they exit with $300m of equity proceeds. Calculate the IRR as a percentage to one decimal place. Enter as a decimal (e.g. 4.6).Members
An acquirer with EPS of $4 and 100m shares outstanding ($400m net income, trading at $50) makes an all-stock offer for a target with $100m of net income and 30m shares outstanding (trading at $30). The acquirer offers a 1.0x exchange ratio (1 acquirer share per target share, valuing each target share at $50, a 67% premium). Tax rate is 25%, no synergies. Calculate the pro-forma EPS to two decimal places. Enter as a decimal (e.g. 5.45).Members
How do you adjust comparable companies for quality differences (margins, growth, ROE)?Members
How do you analyse a bank? What are the key differences from a non-financial company?Members
How do you analyse a luxury goods company?Members
How do you analyse a semiconductor company?Members
How do you analyse a utility or infrastructure company?Members
How do you analyse an insurance company? What metrics matter most?Members
How do you analyse share repurchase versus dividend trade-offs from a valuation perspective?Members
How do you build an M&A football field? Walk through the methodology and what should be included.Members
How do you calculate beta? What are the main limitations?Members
How do you compute and interpret implied multiples? What does it mean to work backwards from a valuation?Members
How do you decompose LBO returns into multiple expansion, EBITDA growth, and debt paydown?Members
How do you handle cross-border valuation? What is the country risk premium and how do you apply it?Members
How do you handle deal structure trade-offs in M&A: cash versus stock, debt versus equity financing?Members
How do you handle ESG considerations in valuation?Members
How do you handle synergies in M&A valuation?Members
How do you handle the conglomerate discount in SOTP valuation?Members
How do you handle valuation when comparable companies use different accounting standards (IFRS vs US GAAP)?Members
How do you handle valuing a cyclical company?Members
How do you model synergy value in M&A premium analysis? Walk through how you'd assess what an acquirer can pay.Members
How do you select comparable companies for a trading comps analysis?Members
How do you select precedent transactions for an M&A valuation analysis?Members
How do you think about valuing a REIT? What makes REIT analysis different?Members
How do you value a bank through a credit cycle?Members
How do you value a bank using P/B and ROTCE? Why are these the relevant metrics?Members
How do you value a company facing carbon pricing or climate transition risk?Members
How do you value a company facing imminent technology disruption?Members
How do you value a company that operates across multiple countries and currencies? What adjustments are needed?Members
How do you value a company with negative earnings? What frameworks do you use?Members
How do you value a cyclical at peak vs trough margins? What are the pitfalls?Members
How do you value a distressed company? What's different from valuing a healthy business?Members
How do you value a distressed corporate bond?Members
How do you value a high-growth company with negative free cash flow?Members
How do you value a holding company versus an operating company?Members
How do you value a media or content company?Members
How do you value a mining company? Walk me through reserve-based valuation.Members
How do you value a pharma pipeline of unapproved drugs?Members
How do you value a pre-IPO company? What's the relationship between private market valuations and expected public market valuations?Members
How do you value a private company? What is the illiquidity discount and how do you apply it?Members
How do you value a private credit investment (direct lending to private companies)?Members
How do you value a regulated utility?Members
How do you value a REIT using FFO multiples and NAV? What are the trade-offs between the two methods?Members
How do you value a SaaS company beyond the basic? What metrics matter and how do they connect to valuation?Members
How do you value a telecom company? What are the key drivers and metrics?Members
How do you value an asset management firm?Members
How do you value cyclical commodity companies through the cycle? Walk through the framework.Members
How do you value media and streaming companies? What's specific to this sector?Members
How does capital structure affect WACC? Walk me through what happens to WACC as a company adds more debt.Members
How does valuation differ between asset-light and asset-heavy businesses? When does each warrant different multiples?Members
How would you analyse an e-commerce marketplace business?Members
How would you value a fintech company at different stages of maturity?Members
How would you value a mining or natural resources company?Members
How would you value a pharmaceutical or biotech company? Walk through the pipeline-based approach.Members
How would you value a private company differently from a public one? What adjustments do you typically make?Members
How would you value a SaaS company? What metrics matter most?Members
Trading comps versus precedent transactions: what does each tell you, and how should they relate to each other?Members
Walk me through a sum-of-the-parts (SOTP) valuation. When is it useful and how do you build one?Members
Walk me through how to value an early-stage venture-backed startup.Members
Walk me through how you build a trading comparables analysis from scratch.Members
Walk me through reverse DCF and when to use it.Members
What is a fairness opinion in M&A? Walk me through the methodology.Members
What is a hostile bid and how does the valuation differ from a friendly deal?Members
What is real options valuation? When does optionality matter and how do you value it?Members
What is terminal value and what's the difference between Gordon growth and exit multiple methods?Members
What is the Adjusted Present Value (APV) approach to valuation? When does it work better than WACC-based DCF?Members
What is the difference between mid-period and end-of-period discounting in a DCF? Which should you use?Members
What is the difference between P/AFFO and P/FFO for REITs? When is each more useful?Members
What is the relationship between ROIC and growth in a DCF? When does growth create value versus destroy value?Members
What's a "football field" valuation chart and how do you build one?Members
What's a precedent transactions analysis and how does it differ from trading comps?Members
What's the difference between a strategic buyer and a financial buyer in M&A? How does this affect valuation?Members
What's the difference between value of growth and value of assets in place? How would you decompose a company's value into these two components?Members
When and how do you use sum-of-the-parts (SOTP) valuation for conglomerates?Members
When does each valuation multiple (P/E, EV/EBITDA, EV/Sales, P/B, P/FCF) make sense?Members
When is APV (adjusted present value) preferred over WACC for valuation? What are the trade-offs?Members
Year 6 (the first terminal year) free cash flow is $82m. Terminal growth rate is 2.5%, WACC is 9%. Calculate terminal value as of end of year 5 in $m using the Gordon growth model. Enter as a decimal (e.g. 572.3).Members
Explain real options in valuation. When and how do you apply them?Members
How do you account for dilution from stock options and convertible securities in a valuation?Members
How do you adjust discount rates when valuing companies in emerging markets?Members
How do you adjust valuation multiples to account for differences in growth rates across comparable companies?Members
How do you calibrate WACC over a long forecast period when the company's risk profile is changing?Members
How do you decompose stock returns into multiple expansion versus earnings revisions versus dividends?Members
How do you handle pension and OPEB obligations in enterprise value calculations?Members
How do you handle revenue forecasting for a deeply cyclical business in valuation?Members
How do you think about terminal value in a DCF? What drives the difference between the two methods?Members
How do you think about valuation in a regime change (interest rates shifting, regulatory shock, technology disruption)?Members
How do you think about valuing a company using both DCF and multiples? What if they disagree significantly?Members
How do you value a company in the early stages of a turnaround? What inputs change versus standard valuation?Members
How do you value a company that's not yet profitable? Think early-stage growth or biotech.Members
How do you value a company with substantial deferred revenue (subscription/SaaS)?Members
How do you value a cryptocurrency or digital asset company?Members
How do you value a distressed or bankrupt company?Members
How do you value a holding company differently from an operating company? Walk through the analytical framework.Members
How do you value a net operating loss carryforward, and when does it actually create equity value?Members
How do you value a pharmaceutical royalty stream? Walk me through the methodology.Members
How do you value an oil and gas exploration and production (E&P) company? Walk me through PV-10 and reserves analysis.Members
How do you value embedded optionality, like a drug pipeline or oil reserves?Members
How does stock-based compensation affect equity value in a DCF? Should you adjust for it, and how?Members
How would you determine whether a stock is overvalued or undervalued? Walk through the analytical framework.Members
How would you value a consumer brand company? What frameworks are specific to brand valuation?Members
How would you value a pre-revenue startup, and what frameworks apply?Members
How would you value a turnaround scenario? Walk through the framework for assessing whether a struggling company can be successfully transformed.Members
How would you value an asset-heavy business like real estate or natural resources differently from an operating company?Members
Walk me through a multi-stage DCF for a fast-growing company. How is it different from a standard DCF?Members
Walk me through a reverse DCF and how it tests a thesis.Members
Walk me through advanced DCF methodology where the company's capital structure changes materially during the forecast period.Members
Walk me through how interest rates affect valuation. What channels are at work, and which matter most?Members
Walk me through how to build a football field valuation chart and what it tells you.Members
Walk me through how to handle valuation in a public-to-public stock-for-stock merger.Members
Walk me through how to value a customer cohort for a SaaS or subscription business.Members
Walk me through how to value a fintech company at different stages of maturity.Members
Walk me through how to value a SaaS company at IPO and then how the valuation might evolve over 2-3 years post-IPO.Members
Walk me through how to value an infrastructure asset (regulated utility, toll road, airport).Members
Walk me through reverse DCF analysis. What's the use case and how does it inform investment decisions?Members
Walk me through sum-of-the-parts (SOTP) valuation for a conglomerate. What are common pitfalls?Members
Walk me through the relationship between WACC, ROIC, and value creation in a DCF.Members
What is replacement value, and when is it a useful valuation approach?Members
What is the difference between a precedent transactions multiple and a trading comparable multiple? Why do they differ?Members
What is the mid-year convention in a DCF, and when should you apply it?Members
Which inputs in a DCF have the biggest impact on the output? How do you stress-test it?Members
A company has EBIT of $80m, tax rate of 25%, D&A of $20m, capex of $30m, and an increase in working capital of $10m. Calculate FCFF in $m. Enter as a decimal (e.g. 60.5).Members
A company has fixed costs of $40m and variable costs that are 60% of revenue. Current revenue is $200m. Calculate the degree of operating leverage (DOL) at this revenue level. Enter as a decimal to one decimal place (e.g. 1.6).Members
A company has revenue of $100m, EBITDA margin of 25%, D&A of $8m, interest expense of $5m, tax rate of 21%, capex of $12m, and an increase in working capital of $3m. Assume net borrowing is zero. Calculate FCFE in $m. Enter your answer as a decimal (e.g. 12.34).Members
A company has revenue of $500m, EBIT of $100m, a 25% tax rate, total debt of $300m, total equity (book value) of $400m, and cash of $50m. Calculate ROIC as a percentage to one decimal place. Enter as a decimal (e.g. 14.3).Members
A company's accounts receivable went from $20m to $26m, inventory from $15m to $22m, and accounts payable from $12m to $18m. Calculate the increase in net working capital in $m. Enter as a positive decimal (e.g. 9.6).Members
A PE sponsor invests $100m of equity for 100% ownership of a company. After a 5 year holding period, the sponsor sells the company and receives $250m of equity proceeds. Calculate the gross IRR in percent (to nearest whole number).Members
A SaaS company has CAC (customer acquisition cost) of $10,000 per customer, ACV (annual contract value) of $5,000, and gross margin of 80%. Calculate the CAC payback period in months.Members
Acquirer Co. has 100m shares and EPS of $4.00. It acquires Target Co. for $1,000m in an all-cash deal financed at 6% interest. Target has net income of $80m. Acquirer's tax rate is 25%. Calculate the change in pro forma EPS in dollars per share (positive = accretion, negative = dilution).Members
How do the three financial statements link together? What flows where?Members
How do trading comps and precedent transactions differ from a modelling perspective?Members
How do you build a debt schedule with mandatory amortisation and a revolver?Members
How do you check whether a financial model balances? What error checks should you build in?Members
How do you forecast margins (gross, EBITDA, operating) in a financial model? Walk through the process.Members
How do you forecast operating expenses? What is the difference between forecasting fixed and variable costs?Members
How do you handle foreign exchange in a financial model for a multinational company?Members
How do you handle scenario analysis (base, bull, bear cases) in a financial model?Members
How do you model a PIK (payment-in-kind) debt instrument?Members
How do you model depreciation for existing assets versus new capex?Members
How do you model synergies in an M&A combined-company model?Members
How do you project tax expense in a financial model? What's the difference between book tax and cash tax?Members
How do you verify a three-statement model is properly integrated? What checks do you run before sharing it with a PM?Members
How does the depreciation schedule work in a financial model? Walk me through it.Members
How would you build an operating model from a company's 10-K? Walk through your approach.Members
How would you model a share buyback program? Walk through the EPS impact and the trade-offs.Members
How would you model FX exposure for a multinational company? What's the difference between transaction and translation exposure?Members
Sponsor acquires a target for $1bn enterprise value (price paid for the entire business including assumed debt). Existing target debt of $300m is refinanced as part of the deal. Transaction expenses are $50m. Minimum cash to leave on the balance sheet is $30m. The sponsor's new debt facility totals $700m post-close. Calculate the required sponsor equity contribution in $m. Enter as a decimal (e.g. 524.7).Members
Walk me through a debt schedule. What does it track and why is it important?Members
Walk me through how to build a multi-currency financial model for a company with significant international operations.Members
Walk me through how to build a sensitivity table for a DCF.Members
Walk me through how you build a three-statement model from scratch. What's your sequence?Members
Walk me through how you would build a trading comparables spreadsheet from scratch.Members
Walk me through how you would forecast revenue for a SaaS company.Members
What are sources and uses of funds in M&A modelling?Members
What are the typical key drivers of a financial model? How do you decide what to forecast in detail versus what to assume?Members
What is a circular reference in a financial model? Why do they arise in three-statement models?Members
What is a debt schedule? Walk me through what items it should track.Members
What is a financial model and what is its purpose?Members
What is a Monte Carlo simulation in financial modelling? When is it used?Members
What is a project finance model and how does it differ from a corporate finance model?Members
What is a three-statement model?Members
What is operating leverage and why does it matter for forecasting?Members
What is reverse engineering a financial model and when do you do it?Members
What is run-rate EBITDA and how do you compute it? When is it useful?Members
What is the days method (DSO/DIO/DPO) for forecasting working capital? Walk through the formulas.Members
What is the difference between maintenance capex and growth capex? Why does the distinction matter for modelling?Members
What is the difference between top-down and bottom-up revenue forecasting?Members
What is the typical structure of a well-built financial model? What separate sheets or sections do you expect to find?Members
A company has $500m of gross PP&E being depreciated straight-line over 10 years (so $50m per year of depreciation on existing assets). Forecast capex for the year is $80m. New capex is depreciated using the half-year convention over a 10-year life. What is total D&A expense for the year in $m? Enter as a decimal (e.g. 24.0).Members
A company has total debt of $800m, cash of $200m, and EBITDA of $300m. Calculate the net debt-to-EBITDA leverage ratio (to one decimal place).Members
A sponsor invests $100m in year 0. They receive a $20m dividend recap in year 2, a $30m dividend recap in year 4, and exit in year 5 with $200m equity proceeds. Calculate the IRR as a percentage to one decimal place. Enter as a decimal (e.g. 41.3).Members
A sponsor invests $100m of equity in year 0. In year 3, the company executes a dividend recap returning $80m to the sponsor. The sponsor exits in year 5 with $200m of equity proceeds. Calculate the IRR as a percentage to one decimal place. Enter as a decimal (e.g. 39.3).Members
An M&A deal expects $40m of run-rate annual cost synergies, fully realised by year 3 with phase-in of 20% in year 1, 60% in year 2, 100% in year 3 onwards. Synergies persist in perpetuity. Tax rate 25%, discount rate 9%. Calculate the after-tax NPV of the synergies in $m at year 0. Enter as a decimal to one decimal place (e.g. 34.3).Members
How do you build a 2-way sensitivity table for a DCF, and what variables typically go on the axes?Members
How do you build a comparable companies analysis from scratch?Members
How do you build a debt schedule with mandatory amortisation, interest expense, and revolver draws?Members
How do you build a model for a telecom company? What are the key drivers?Members
How do you build a revenue model? What approaches would you use for different types of companies?Members
How do you build a sensitivity table in Excel? What is the difference between a one-variable and two-variable sensitivity?Members
How do you build a trading comps analysis from scratch?Members
How do you build a working capital schedule for a cyclical business?Members
How do you build an equity rollforward in a three-statement model? What items typically affect retained earnings and other equity accounts?Members
How do you forecast gross margin and operating margin? What drivers do you look at and how do you stress-test them?Members
How do you forecast revenue for a cyclical business like an industrial manufacturer?Members
How do you forecast revenue for a hardware-plus-recurring-software business?Members
How do you forecast revenue for a marketplace business (GMV-take rate model)?Members
How do you forecast revenue for a SaaS company? What drivers do you build into the model?Members
How do you forecast working capital using the days method (DSO/DIO/DPO)? Walk me through the process.Members
How do you forecast working capital? What drivers do you use for receivables, inventory, and payables?Members
How do you handle a leveraged recapitalisation or dividend recap in an LBO model?Members
How do you handle circular references in a financial model?Members
How do you handle FX hedging in a financial model for a multinational company?Members
How do you handle one-time and non-recurring items in a financial model? Walk through the approach to getting to "core" earnings.Members
How do you handle refinancing in a debt schedule? What complications come up?Members
How do you incorporate non-financial drivers (ESG, regulation, geopolitics) into a financial model?Members
How do you model an acquisition in a financial model, and what are the key considerations?Members
How do you model an earnout (contingent consideration) in an M&A deal?Members
How do you model debt covenants in a financial model? What covenants matter most and how do you track compliance?Members
How do you model deferred revenue and billings for a SaaS company? Why do these matter analytically?Members
How do you model depreciation and capital expenditures?Members
How do you model FX exposure for a multinational company?Members
How do you model revenue and cost synergies in an M&A deal, and how should an analyst evaluate the credibility of stated synergies?Members
How do you model seasonal revenue patterns in a financial model?Members
How do you model share count, dilution, and earnings per share in a financial model?Members
How do you model synergies in an acquisition? What's the difference between cost synergies and revenue synergies, and why are revenue synergies typically discounted more heavily?Members
How do you model tax expense in a three-statement model? What about deferred taxes and NOLs?Members
How do you split maintenance capex from growth capex in a model, and why does it matter?Members
How do you stress test a financial model, and what scenarios should you consider?Members
How do you structure a financial model for a multi-segment business? What sheets and links would you build?Members
How would you model a divestiture or spin-off? Walk through the process and key considerations.Members
Walk me through how to build a pension schedule that ties to the income statement and balance sheet.Members
Walk me through how to build a share count schedule that tracks dilution from SBC, options, RSUs, and convertibles.Members
Walk me through how to build an accretion / dilution analysis for a stock-financed acquisition.Members
Walk me through how to build the cash flow statement portion of a three-statement model.Members
Walk me through how to model a real estate property at the property level (not REIT-level).Members
Walk me through how you build an LBO model from scratch.Members
Walk me through how you build an M&A combined-company model (accretion-dilution).Members
Walk me through how you compute WACC step by step for a public company.Members
Walk me through how you forecast capex. How do you justify the assumption?Members
Walk me through how you forecast working capital using the days method. What are common pitfalls?Members
Walk me through how you model a spin-off transaction.Members
Walk me through how you would build a DCF model in Excel from scratch. What sheets do you create and what flows between them?Members
Walk me through how you would build a debt schedule for a leveraged company with multiple tranches and a revolver.Members
Walk me through how you would build a sensitivity table in Excel. Why are sensitivity tables important?Members
Walk me through how you would build an LBO model.Members
Walk me through how you would forecast revenue for a SaaS business. What are the key drivers?Members
Walk me through how you would model debt refinancing in a financial model. What flows through each statement?Members
What are best practices for structuring a financial model, and why does structure matter?Members
What are the most common errors you see in financial models, and how do you audit a model someone else built?Members
What error checks should you build into a financial model?Members
What is a circular reference in a financial model? Where do they typically appear and how do you handle them?Members
What is operating leverage? How does it affect financial modelling and valuation?Members
What is qualitative modelling and how does it complement quantitative modelling?Members
What is roll-forward analysis and why is it important in financial modelling?Members
What's different about modelling a bank compared to an operating company? Walk through the key concepts.Members
What's different about modelling an insurance company? What are the key concepts to understand?Members
What's the difference between bottom-up and top-down forecasting? When do you use each approach?Members
When do you use a top-down model versus a bottom-up model? What are the trade-offs?Members
You are building a model and the balance sheet does not balance. How do you debug it?Members
How do you handle complex tax modelling: NOLs, foreign earnings repatriation, GILTI, and deferred tax assets and liabilities?Members
How do you handle modelling for a high-uncertainty business (early-stage, regulatory shift, technology disruption)?Members
How do you handle modelling for an insurance company with multiple lines of business, reinsurance, and embedded value?Members
How do you model operating leverage in a forecast, and how does it affect downside scenarios?Members
How do you stress-test an LBO model? What scenarios should you run?Members
How would you approach building a financial model for a company in an industry you've never analysed before?Members
How would you audit someone else's financial model? What are you specifically looking for?Members
How would you build a "quick and dirty" valuation from limited information? When is this appropriate?Members
How would you build a financial model for a cyclical business? What's different from modelling a stable business?Members
How would you model a company in turnaround? What's different from forecasting a stable business?Members
In an LBO, the sponsor invests $200m of equity and takes on $600m of debt to fund an $800m acquisition. By exit in year 5, EBITDA has grown from $100m at entry to $150m. Year 5 net debt is $400m (sponsor used cash flow to pay down $200m of debt over the holding period). Exit is at 10x EBITDA. Calculate the sponsor's MOIC (multiple of money). Enter as a decimal (e.g. 4.5).Members
Walk me through common errors in LBO models and how to catch them.Members
Walk me through how to build a comprehensive capital allocation model for a mature company.Members
Walk me through how to build a model for a company emerging from bankruptcy with fresh-start accounting.Members
Walk me through how to handle modelling for a take-private transaction with management equity rollover and earnouts.Members
Walk me through how to integrate operational and financial drivers in a model. How do you link operations metrics to revenue, costs, and capex?Members
Walk me through how you build a comprehensive bank stress test model including capital ratios, regulatory thresholds, and dividend constraints.Members
Walk me through how you build an accretion-dilution model. What complications come up beyond the basic case?Members
Walk me through how you build an LBO model. What are the key assumptions, the structure, and what drives returns?Members
Walk me through how you would model an M&A deal from sources & uses through to the pro forma combined company.Members
Walk me through the architecture of a multi-segment company model with consolidation.Members
Walk me through the structure of an LBO model. What are the key tabs and how do they interact?Members
What are the most common mistakes junior analysts make in financial models? How do you spot them?Members
What ratios and diagnostics would you use to detect potential earnings management or financial reporting issues?Members
What stress tests would you run on a financial model before sending it out? What downside scenarios should you consider?Members
You're given 3 hours to build an integrated three-statement model for a company you've never analysed. Walk me through your approach.Members