Placement Special: Finance Interview TipsNovember 28, 2017
Interviewing has changed a lot in the last few years. Ten years ago, interviews comprised going through your resume. Applicants were prepared for personal questions like ‘Tell me about yourself’ and “What are your strengths and weaknesses?”
Those days are long gone. Interviews in the finance sector are a grueling mental workout. It’s much like preparing for an exam and it makes sense.
Companies are going to pay you to be efficient and they are hiring you to make sure you can do the job. Hiring is a costly process. It requires time on the part of both the HR and line management. They take time out to interview you and then discuss the interview internally. That is time taken out of the business. Their time is expensive and ergo, the process needs to yield fruit. This is why you need to approach your finance interview like you would a marathon and not a sprint. Start well in advance and realize that these opportunities are hard to come by. Wasting them is not an option.
Finance interviews today are usually divided into the following:
- An aptitude test – much like a GMAT, which tests your analytical and mathematical skills
- A domain interview – to test your finance knowledge and your analytical skills
- A personal interview – to gauge communication and organizational fit
- A group discussion – a topic is given to a group and the group is asked to debate it
While there may be many more rounds, the above can be taken as the minimum.
Preparing for an Aptitude Test
- Practice, Practice, and Practice
At Imarticus, we have a weekend aptitude test sessions where students are taught how to take them. After that, students are advised to practice every day. The India Bix site is a good place to practice.
Finance Domain Interview Tips
- Study, study, study
- Divide your study into parts
Be prepared for the kind of questions you can get on various topics. Here are a set of sample questions to give you an idea of the kind of questions you can expect.
- Walk me through a cash flow statement
- How does FCFE flow from Net Income?
- Consolidate the two balance sheets
- Here are three financial statements. Now calculate ratios
- ROCE and ROE related questions
- Discounted Cash Flow (DCF): We say Earnings Before Interest and Tax (1-tax) + depreciation/amortization- changes in working capital – capital expenditure. So should the amount of tax deducted be the actual amount paid or the one that is before giving the effect of interest?
- What is WACC? How is it calculated?
- What are the ways to value a company?
- What are the problems with DCF valuation technique?
Equity Research (If it is an Equity Research Role)
- Pitch me a stock
- What is your investing strategy?
- Give me three undervalued stocks
- Do you believe the Sensex is fairly valued at this point? What is the Price/earnings of the Sensex?
Mergers and Acquisition (If it is an M&A job)
- Walk me through the M&A process
- What is the difference between the buy side and the sell side and how does it matter for a banker
- What is an LBO?
- Talk to me about the Indian M&A market
- Describe the latest deal that piqued your interest
- Why M&A?
- How would you go about researching a new industry
- What is winner’s curse?
- How many litres of paint are sold in Mumbai every year
- Why Finance?
- What interests you about Investment Banking?
- What area of finance interests you? Be prepared for questions in this area?
The Personal Interview
- Walk me through your resume
- Talk about a time where you were disappointed with what you achieved. Tell me how you handled it?
- Tell me about a time you led a team?
- Are you ready to work the long hours?
- If you have included interests like tennis, basketball, music, reading and so on, be prepared to back them up. For instance, if you are interested in tennis, make sure you know the rankings, a little bit about your favourite players and your own tennis routine.
Don’t take anything in your resume for granted. Be prepared to back everything.
These are only examples of what can be asked. There are numerous websites that can help you prepare. Imarticus Learning has an entire Interview Test Preparation short course. We take mock interviews to make sure you are ready for your interview. Students are videoed so that they can understand what they are doing wrong.