Top 20 Corporate Finance Interview Questions You Must Know! #Finance

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and if you are new to this channel then you can subscribe us by clicking the bell icon that’s given below welcome everyone today we have a topic of for the top 20 corporate none;">Finance interview questions let me give you a small snapshot of what we are going to do we are going to learn as a part 1 the corporate Finance basic

interview questions like I’ll give you some of the options like you know what are the Financial Statements of the company what do they tell about a company I would say that second one is like explain what exactly the Cash Flows goes in details that can be one

of the questions explains of the sources for short term Finance used by the companies and some of more of the questions like you know what is working Capital

a question like you know a company buys an Assets walk me through the impact on these Financial Statements so these are the couple of things we are going to discuss in the course of our discussion let’s begin with our first topic or the first question see

preparing the financial Finance interview the list contains the top 20 covered with no text-decoration: none;">Finance interview questions and those are some of the questions that are the most frequently asked by employees well we will do things in two parts one is part one that is the corporate color: #1a73e8; text-decoration: none;">Finance interview questions basics and then part to corporate Finance interview questions which is going to be at once

let’s begin with the part 1 the corporate Finance interview questions and this will be some of the basics ones ok you will start with the first one now what are the

what are the Financial Statements of the company I mean that is the question what are the financial statement of the company and they can also ask that know what they tell about what do they tell about okay this can be a question so answer to this you know how how would you answer

see Financial Statements of a company are statements in which you know the company keeps a formal record about the company’s position and the performance over time now the objective of this financial statement is to provide financial information you know about the reporting

entity that is useful to existing in the potential investor or probably the Creditors or the lenders in making decisions about whether to invest or give Credit or not so there are mainly three types of Financial Statements the first one is what we

call as the Income statement okay now the Income statement tells about the performance of the company over a specific account account period financial performance is given in terms of Revenue in expenses and the same is generated through operating

and non-operating activities the second one goes as the Balance Sheet okay now the Balance Sheet tells about the the position of the company at a specific point of time okay third is you know sorry and on the Balance Sheet only let’s stay

there it consists of Assets and Liabilities or owner’s Equity basic equations of like you know a is equal to L plus owner’s Equity that Liabilities owners Equity the third one is the

Cash Flow statement okay now Cash Flow statement tells about the amount of the cash inflow and outflow and the Cash Flow statement tells about how the cash presence in the Balance Sheet changed from the last to current year okay

the second sort of question they can ask is you know what is the Cash Flow statement something this kind of question can also be asked well the Cash Flow you can divide in say them you know the Cash Flows divided into three or reading okay

investing activities and you can see financial activities no if we talk about operating activities that are cash inflows like you know which is generation of funds in the normal operations cash outflows are expenditures of the funds in the normal operations when we talk about talk about investing

the inflows are sale of plant and equipments liquidation of long term Investments and outflow can be like you know plants purchases of plants and equipments Investments in the long term Investments and so on and so forth when we talk about the

Cash Flow from the financial activities it includes inflows like that assurance common stock preferred stock and other Securities and the outflow can be something like there’s like retirement of Debt common stock and preferred stocks and

payment of the cash dividend right okay let’s study the third type so over here they can ask the question something like this that you know explain the three sources of short term of none;">Finance that is used by the company the three source of short term C or always remember that you know the short term financing is done by the company to fulfill the current cash needs and the short term sources of the bold; color: #1a73e8; text-decoration: none;">Finances are required to be repaid within closely around let’s say 12 from the financing need and some of the short term short term sources of financing they are like you know the first one is the trade Credit okay

now what is straight Credit trade Credit is basically an agreement between the buyer and the seller of the goods and in this case the buyer of the goods purchases the goods on Credit that is the buyer pays no cash to the seller at the time of

buying the goods and only to pay at later specific date so the trade Credit is based on a mutual trust between the buyers of the curds and the amount the cash after a specific date then comes the bank Overdraft okay now this is a type of a short-term

Credit which is offered to individuals or probably a business entity having a current account which is subject to the bank’s regulation so in this case an individual or a business entity can withdraw cash more than what it presents in the account and interest is charged in

the amount of the or drop which is withdrawn as Credit from the bank and the last one is you know unsecured banked Loan know what is this well you need to answer that you know that unsecured bank Loan is a type of Credit which

which banks are ready to give in his payable within 12 months so the reason why it is called as unsecured bank Loan is that there is no collateral is required by the individual or probably the business entity taking this kind of Loans okay okay and now quickly let

me run you through the next sort of questions something like this you know what is the working Capital okay well you can explain them you know the working Capital is basically the current Assets minus the current liability and the working

Capital tells about the amount of the Capital that is tied up into the business of the you can say the daily activities okay and post factor you can say that you know some of the daily activities like account receivables payables inventory and and many more so

working Capital can tell us in amount of the cash needed to pay off the company’s obligation which have to be paid off within closely around 12 months of timeframe now the fifth question is that you know they can ask you know let’s say a company buys an asset ok so they

will ask you that you know how about you walk us through the impact on the three financial statement if a company buys an asset well purchase of an asset is a transaction that is done by the company which will impact all the three statements of the company so let’s say the asset is the

I’ll say equipment closely around let’s say $5 million okay so in Balance Sheet what will happen you can say that the cash will go down by will we will go down by $5 million okay and you can say that you know that will effect at the same time asset will be recorded cash

will reduce equipments will rise by 5 million which will crease the asset side of the Balance Sheet and will also increase the liability side it is saying that hence the Balance Sheet of the company sorry both both the places sorry have one at one side asset will

increase by equipment other side the cash will reduce so both asset is increasing and decreasing and hence a balance with the company will be tallied in terms of the Income statement if you see there will be no impact with the first year of the Income sitting but

after the first year the company will have to be charged with something that’s called as depreciation expense on the purchase equipment which is which the company will have to show it in the Income statement of the term and the last one you can see is the CFS the Cash

Flow statement the over here you can say the Cash Flow statement assuming that only the cash has been paid by the company to purchase the equipment so the Cash Flow from investing will result in the cash outflow of closely around $5 million after this I

want you to run you through some of the part two question part two which are solve the advanced-level question that can also be asked during the course now let us now have a look at you know advanced corporate interview questions the first one you know then they can ask us is what is the deferred

tax liability and why it may be created or it might be created that can be a question so you can say that the deferred tax liability is a firm of a tax expense which was not paid to the Income tax authorities in the previous years but it is expected to be paid in the future you so

this is because of the reason that the company pays less the Taxes to the Income tax authorities and what is reported as payable so for example if a company uses a straight-line method of charging depreciation in its Income statement for shoulder

but it uses the double declining method in the statement so which are reported in the to the Income tax authorities and therefore the company reports or deferred tax liability as the paid less what was payable the second sort of question is like you know what is financial modeling

this is something really frequent and they are asking terms of whenever it comes to advanced questions so first of all you can see that you know the financial modeling is sort of a quantitative Quant analysis which is used to make the decision of the forecast about the project generally in the

asset pricing model probably corporate Finance and different hypothetical variables are used in the formula to ascertain what future holds or for a particular industrial for

the particular project but you know if you sit in the corporate Finance and financial modeling means like you know Forecasting companies in the financial

statement like you know Balance Sheet CFS or probably Income statement okay and this forecast are in turn used by the company’s Valuation and Financial Analysis and now with respect to Investment Banking you

can talk about the financial models that you have to be prepared like you know so on the template serve may be are available on the website itself the third sort of question that can be asked let it know what are the most common multiples that is used in Valuation this is one of

the very important question that you know get very far – well there are a lot of I’ll just start with you know just right EV to sales ratio EV – one of the most important EBITDA ratio EV to EBIT ratio just the effort ratio beg ratio can also be their price to Cash

Flow ratio price to book value ratio and something like you know Ev to Assets ratio okay so something such sort of questions can be asked now they can also ask a very important question the other question can be like you know describe what is WACC and its components okay

so you can say the WACC is the weighted average cost of Capital which the company is expected to pay off on the Capital it has borrowed it is borrow from different sources so WACC is sometimes referred to as the firm’s cost of Capital okay

and the cost of the company for borrowing the Capital is dictated by the external sources of the market the formula is something like this you know you multiply the weight of Debt into the cost of Debt weight of Equity – cost

of Equity and so on and so on and so forth so this was some of the important questions that you should remember while while going for the interview and it will it will be highly helpful if you if you take care on this questions well that’s the end of the topic if you have

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