We’ve talked a lot about getting a job in finance lately, or at least getting an interview. We looked at lack of experience and how to gain some practical experience even without a finance job last week. A few weeks back, we looked at how to break into finance from another industry and some of the challenges you might find.
This week, it seemed only natural to tackle the next challenge in your finance job hunt, the interview! We’ve covered how to get a finance job from networking to interviews in a five-part series last year but have never looked at actual interview questions. This week, we are going to look at the top 10 most common finance job interview questions and things to think about in your response.
Of course, these aren’t the only questions you might see but each has a pretty good chance at being asked regardless of which position you’re applying. Besides preparing for these specific questions, thinking through your answers will help prepare for other related questions.
The 10 Most Common Interview Questions for Finance Jobs
1) Why should we hire you? What do you bring to the table that others do not?
You do not need to know the other candidates for this one, just yourself. Prepare at least two selling points before you go into the interview, something that you’ve accomplished or that set you apart. Do you have stronger experience or any particular project to which you can point? What have you done that others have not?
2) What challenges have overcome?
This shows perseverance and dedication, two characteristics you will need in a challenging industry like finance. Your example can be personal or professional. While you may have overcome a physical challenge, focus on the mental traits that helped you overcome it. Your future employer wants to know that when hours get long or the team needs to play damage control, you will have what it takes to step up.
3) What would your previous supervisor and coworkers say about you?
This is just as much personal as it is professional. You are going to spend about half of your waking hours with the people in the room and on the team, your personality needs to fit well with theirs. As with all answers, its best to answer the question directly and then reinforce it with a specific example. Don’t just say your coworkers would say you are hard-working and fun, give examples of instances that prove you have those traits.
4) Walk me through the Income Statement or Statement of Cash Flows
Even if you have no experience in finance, you can expect a few technical questions. The most likely of these are questions related to basic financial statement accounting and analysis. The employer wants to know that you have at least a basic understanding of these topics so they’re not starting from scratch in training. Be brief with these answers, just hitting on the most general line items.
5) What is your greatest strength and weakness?
This is about the lamest question I’ve ever heard and I don’t know why employers still ask it, but they do. For your strength, hit on one of the selling points you prepared for why you are the best candidate.
For your weakness, don’t take the feeble way out and say you work too hard or something like that. Provide a genuine short-coming but how you are trying to fix it. Your employer wants to know that you can honestly look at yourself and seek improvement. Remember, you need to reinforce your answers with specific examples for proof.
6) What is working capital and how does it apply to cash flow modeling?
Another technical question but fairly easy if you have spent a little time preparing your practical knowledge of the financial statements and modeling. When you’re answering these statement or modeling questions, be sure to touch on how the statements are connected through different accounts. This shows a broader understanding of how everything works together instead of just that you’ve memorized one process.
7) Where do you see yourself in five years?
Your career path needs to be aligned with the position and opportunities at the firm. No employer wants to invest money in someone through years of training only to find out that the employee’s ambition is outside the company. Know the career path from the job for which you are applying to an intermediate and senior position in the firm.
8) Talk me through what happens on the three financial statements after a capital investment
Again, it’s important that you know how changes on one financial statement affect another and how the process works itself out. For a capital investment, there is no income statement impact at first but cash decreases on the balance sheet while PP&E increases. The investment is also a cash outflow on the Statement of Cash Flows. As depreciation accumulates on the balance sheet, decreasing cumulative PP&E, net income is reduced from the expense while depreciation is added back to operational cash flow.
You probably do not need to go as detailed as ratios and other ideas, just the general process to show you have a working knowledge.
9) What sports or other competitive activities do you enjoy?
Finance is a competitive industry and you need that drive to be successful. By showing that you participate in sports, and enjoy the competition, you are showing that you will go a little further to help the firm succeed. Besides giving an example, it’s best to be able to point to an accomplishment. Anyone can go out jogging a few days a week, your employer wants to know that you pushed yourself to win.
10) What stock would you pick right now and why?
This is more about your presentation skills and ability to sell than it is about analysis. There are going to be reasons to buy or sell any investment. Your employer wants to know that you can rationally and intelligently pitch one side of the argument and convince clients, the portfolio manager or others on the team.
Remember, it isn’t only about what you say but also about how you say it in an interview. Have confidence in your answers and try not to stammer for the perfect thing to say. As an analyst or asset manager, people will look to you as an expert and trusted source. Employers are looking for someone that can speak clearly and confidently to convey that trust to clients.
Try to keep your answers to less than two minutes to avoid rambling. Employers don’t expect you to detail everything in a short interview, just make sure you hit on the general ideas and key points. Silence is ok and don’t stretch to keep adding to an answer just because they haven’t stopped you.
Finally, it’s ok to say that you do not know something. It is much better to say you do not know than to stammer through a guess. It will come across as lacking confidence at best or like you don’t know what you’re talking about at worst.
‘til next time, happy interviewing!
Joseph Hogue, CFA