finance interview case study

Financial Services Case Interview: 4 Tips on How to Pass

• Last Updated December, 2021

A good case structure will get through any consulting case interview question. But some industries have specific issues that make it a lot easier to pass the case if you know what to expect. Financial services case interviews are like that.

Government regulation of financial institutions, their corporate structure, and business models are quite different from other industries, so it’s good to brush up on the financial services industry before facing a case.

In this article, we’ll discuss:

• Differences between financial services firms and other firms.
• Common types of financial services case interviews.
• A financial services case example.
• 4 Tips on acing your financial services case interview.

Let’s get started!

Differences Between Financial Services Firms & Other Firms

Financial services case interview example, common types of financial services case interviews.

5 Tips On Acing Your Financial Services Case Interview

Financial services firms don’t make cars or serve hamburgers to customers to generate revenue the way an auto company or a fast-food restaurant does. Instead, they provide retail customers (individual consumers – people like you and me) and businesses with loans, deposit accounts, or insurance policies. Or they help them invest their money in stocks, bonds, or other financial instruments.

Corporate Structure

There are many different types of financial institutions and they exist both on paper (e.g., online banks) and in actual brick-and-mortar form (e.g., retail bank branches with ATMs). Typical financial institutions include:

• Commercial banks (provide business loans, home mortgage loans, and savings/checking accounts)
• Investment banks and securities firms (help people buy and sell stocks and bonds and help companies issue them)
• Insurance companies (provide insurance for homes, cars, business risk, health, etc.)
• Mutual funds and pension funds (manage retirement savings or savings for other goals, e.g., education, health, etc., by investing it in stocks, bonds, and other assets)
• Microfinance companies (provide small loans to populations underserved by traditional financial institutions)

Businesses that “make stuff” have a factory where parts go in one end and cars or hamburgers go out the other. Financial institutions, on the other hand, have people who handle the bank accounts, stocks purchases/sales, or insurance products that they provide, and all the investment decisions and paperwork that go with that service.

Business Model

Unlike other sectors, the financial services industry’s business model is largely based on interest, fees, and premiums. Don’t get bogged down by the variety of products and services that a financial institution has to offer. You only need to remember:

• Key income sources: interest earned by selling retail and corporate loans, premiums earned on insurance policies, fees earned on financial advisory (e.g., stockbroking) or on deposit accounts, etc.
• Key costs: interest paid on deposits from retail investors and corporates, insurance claims/payouts, branch operations, manpower, SG&A, etc.

Always confirm and validate the drivers of revenue and cost with your interviewer before jumping to solving any financial services case.

Regulation and Risk

A well-functioning financial system is vital for the economy, businesses, and consumers. When a financial institution fails, it can create problems for the wider economy as the 2007-2009 financial crisis showed us. Financial services firms, therefore, attract high levels of scrutiny and oversight.

Government regulation helps make sure that these institutions have good management so they don’t make bad investments or become too risky. They require that financial institutions hold “shock absorbers” (i.e., capital) to help deal with bad investments. Each country has its own set of norms and regulations that create the framework and operating model for financial institutions.

In a financial services case, therefore, it’s always important to include regulation as a category in your issue tree. You can check with your interviewer on which aspects of financial regulation and risk are relevant to ensure that ideas you brainstorm in the case won’t break laws. Aligning on this upfront increases your credibility with the interviewer, but regulation is not typically the focus of the case.

Nail the case & fit interview with strategies from former MBB Interviewers that have helped 89.6% of our clients pass the case interview.

Financial services cases can include revenue growth, cost reduction, or new product introduction like they would for any other industry. They can also include managing the “back office” where financial account information is maintained or stock and bond trades are cleared.

Here are some financial services case interview examples:

• Disconsa – A McKinsey case on developing better financial service offerings for a not-for-profit entity serving remote Mexican communities.
• Internet Bank – An L.E.K. case on product diversification for a large insurance company in Europe.
• Big Bucks Bank – A Deloitte case on technology transformation for a large US-based bank.
• Bank of Zurich – A Deloitte case on developing a strategy to structure the organization’s data program.

We’ve also curated a list of case examples , to help you hone your business problem-solving skills. Head to Our Ultimate Guide to Case Interview Prep to learn what a case interview is and its various stages (i.e., opening, structure, analysis, and conclusion). The best way to get smarter about answering financial services case interview questions is to master this general four-part approach first and then apply financial services specifics as appropriate.

Let’s dive into a financial services case example.

Case Question

“Your client is Go-for-Growth bank, a large bank in a frontier market that wants to rapidly build its agent network to grow revenue for its payment and banking business. How should they go about it?”

First, repeat the main information in the prompt to the interviewer to make sure you got it right, and ask clarifying questions. If you don’t know what a frontier market is or who banking agents are, ask your interviewer.

Frontier market is a classification made by Standard & Poors, a financial rating agency, that’s used to classify less advanced economies in the developing world, e.g., Vietnam, Kenya, Nigeria, Cambodia, etc.

A banking agent is a retail or a postal outlet contracted out by a financial institution (in this case Go-for-Growth bank) to process clients’ transactions. Typically, in less advanced economies, the population has little access to banks but significantly higher interaction with establishments such as pharmacies, grocery stores, post offices, and beauty salons. The agents help the banks get new customers and typically make money on commissions.

Take a moment to develop your own hypothesis for the Go-for-Growth bank case.

Financial Services Case Hypothesis

Your hypothesis could be that a banking agent is a cost-efficient way for the bank to acquire customers and distribute financial products vs. having to set up their own branches across the country (including paying rent for office space and hiring staff in each location).

Next, validate your understanding of the bank’s business model, corporate structure, and applicable regulations. Here, the bank is a traditional commercial bank that wants to add agents as a channel to acquire retail customers and sell traditional financial products and services (e.g., loans, deposits, etc.) Building an agent network is allowed within the regulatory framework of the country.

A great candidate would also establish:

• The purpose of agent acquisition: “Why agents?” “Why now?” and “What is the size of the opportunity (or market) that the bank is chasing?” Here, the interviewer can confirm your hypothesis about agents being cost-efficient vs. Go-for-Growth Bank having to set up brick-and-mortar establishments.
• The size of the opportunity: Establishing an agent network is a big undertaking so it’s worth ensuring the opportunity size is big enough to justify the cost. In this case, the total opportunity size is $3 billion given the country is largely underpenetrated with only 10-20% of the total population of 100+ million having access to financial services, so the opportunity is worth it. (Note that to make this a short case or one that would be appropriate for undergrad summer interns, sizing the market could be the sole focus.)
• The client’s key success metrics : “What does success look like to Go-for-Growth Bank?” Here, you should clarify the target network size and the target timeframe to meet the client’s growth target. Say, your interviewer adds that they want to scale up to a size of 200,000 agents in 2 years to achieve the topline impact of $3+ billion.

You’d now ask for a minute to lay down your thoughts so that you can build your structure.

Take a moment to think about how you would structure this case before reading ahead. That will give you a sense of what business issues come naturally to you in a financial services case and where you need to push your thinking further.

Here’s a sample case structure:

• Which services/revenue streams should Go-for-Growth Bank market via the agents and to which end customers?
• Which of the existing products and services are most profitable?
• Which products and services don’t need extensive training for agents to sell?
• Which products and services best meet the needs of the customers who agents serve (e.g., payments and basic deposit accounts and loans, not more sophisticated financial products).
• Is there a segmentation of customers who should be targeted by the agents?
• Will the bank need to tweak their products to make them profitable to customers acquired through the agent network? (An A+ answer would note that clients with low incomes or lumpy earnings might need bank accounts with lower minimums.)
• Is there opportunity for cross-sell/ up-sell of products to customers?
• How to reach the agents? (sales force/feet on the ground vs. email campaign)
• How to get them interested in becoming a channel partner? Will one-time, up-front incentives be required?
• What is the process to get them on board?
• What cut can be given to the agents (so the bank continues to be profitable)?
• What will be meaningful for the agents?
• Can gamification reward schemes be introduced?
• Would certification or co-branding, such as a sticker to display the agent’s affiliation with Go-for-Growth Bank, appeal to potential agents?
• What banking products can be sold to the agents?
• Can the agents be offered discounted pricing on the products?
• What is the up-front effort/cost to acquire agents?
• What is the expected revenue or profit uplift per agent to the bank?
• How much should each agent sell annually/monthly to continue being profitable to the bank?
• What are the recurring costs to maintain the agent network?
• Which metrics should be used for tracking performance?
• Can low performers be segmented further based on their potential?
• What will be the plan of action for consistent low-performing agents?
• Which training(s) and products’ brochures should be offered to agents to keep the customer conversion rate high?
• How can we create a community within the agent network to provide product information updates and support agency retention (such as Facebook or WhatsApp groups)?
• How can we set up the right operating model for providing cash to agents as needed?
• How can we make sure the agents have the right processes in place to ensure Go-for-Growth Bank’s cash is safeguarded?

This structure is quite exhaustive. Don’t worry if you didn’t have every bullet point in your structure. In practice, since you only have about 2 minutes to lay this out, you don’t need to write full questions on your piece of paper but only a couple of keywords for each bucket and each sub-bucket.

We recommend going through our article on Issue Trees to learn more about how to create a case structure.

After you lay out your case structure, your interviewer would prompt you to brainstorm which agents to acquire and which products and services to sell, so if you’ve already alluded to it in your structure, that gives you a headstart.

Here, your interviewer would hand you a few exhibits that detail population density by region, classification of the retail stores with metrics on annual revenue, footfall, etc., a list of Go-for-Growth Bank’s products and the associated profitability of each product, and the results of a survey that details the wishlist of financial services and products by underserved consumers and small businesses.

On brainstorming ideas, you’ll be rated on both your structure and your creativity. Make sure to always articulate the logic behind your ideas, using your past experience, analogies, or your general knowledge.

Ideas for Increasing Go-for-Growth Bank’s Revenue

• Target the agents that receive the highest customer footfall (grocery stores) AND/OR agents that are well-versed in handling legal/administrative documentation (postal outlets). Let’s assume the bank can cover 60% of the untapped population by acquiring grocery stores and postal outlets as agents in the Tier 2 cities.
• Sell products that are profitable to the bank and at the same time relevant to the customers (payment transfer, insurance products, working capital loans, home loans, etc.)
• Onboard agents as customers first to establish other customers’ trust in the bank’s products. Given it’s a less advanced economy where customers rely on heavy interactions with retail stores for information on financial products, word-of-mouth from the agent will establish trust upfront and lead to longer lifetime value (LTV) for the bank.

Ideas on Incentives for Agents

• Provide commission to agents of 0.15% on each insurance/loan product.
• Organize monthly or quarterly leagues with leaderboards to recognize top performers, e.g., highest transaction value, highest growth, highest customer acquisition, etc.
• Leverage social media to build an agent community via Facebook or WhatsApp groups. These groups can create engagement and serve as an efficient mode of communication, allowing the bank to solicit agent referrals and publish leaderboards.
• Introduce friendly competitions like “Best shop-front display” to increase the visibility of Go-for-Growth Bank’s products.
• Test if affiliation with the Bank’s brand in the country is a motivator for agents.

You could classify “high performers” as agents with transaction volume and transaction value in the top 10%. Agent’s potential information (e.g., footfall, turnover, location potential) can also be collected to have a more nuanced segmentation for tracking and governance purposes.

Running the Numbers on Go-for-Growth’s Agent Strategy

Finally, you should consider pressure testing the unit economics of each agent to ensure the bank’s targets are met. To do this, you’ll need to leverage the information you were provided during the opening of the case as well as make some assumptions. A quick way to round this up would be:

• Total # of customers = % of population targeted * Annual conversion rate per agent = 60% of population targeted * 10% conversion rate = 60% * (80% [% of population currently underserved by financial institutions] * 100 million [total population]) * 10% [conversion rate]= 4.8 million customers
• Revenue per customer = Avg # of banking products sold per customer * Annual price per product = 1.5 avg # of products * $500 price 1 = $750 annual revenue per customer.

1 Based on data from interviewer.

• Therefore, Topline impact = 4.8 million * $750 = $3600 million = $3.6 billion (validated as this meets the $3+ billion target)

Keep drawing on the interviewer to test the assumptions and/or ask for industry benchmarks on conversion rates, average number of products, prices, etc. to make your analysis rigorous.

A great candidate would also establish bottom line impact for the bank:

• Total bottom line opportunity = Topline opportunity * Profit margin = $3.6 billion * (5-7% profit margin – 0.15% cut to agents) = $175 to $250 million.

“Go-for-Growth Bank’s CEO walks into the team room and asks you about your findings. What do you tell her?”

You should lead with your recommendation to the client and detail the key reasons supporting that recommendation. Then, mention any risks to consider which might impact the outcome and the next steps that you’d suggest to double down on the analysis. There is no need to repeat everything you covered during the case: be succinct and stick to the key arguments.

What would you say? Give it a try before reading ahead.

“We recommend acquiring the grocery stores and postal outlets in the Tier-2 cities as agents for the bank to help sell loan and insurance products at a profit margin of 5-7% to retail and small business clients with a 0.15% cut to the agents. This way, we cover 60%+ of the underpenetrated population with our highest profitability products and provide an additional source of income to the agents at no additional cost to them. The high perceived value in being affiliated with the Go-for-Growth Bank brand will attract agent interest. This will allow us to add $3 billion to the top line and $175-$250 million to the bottom line annually.

One concern we’d like to address next is whether competitors could potentially take away our first-mover advantage by luring away agents with better commissions, especially in densely populous areas. We should address this potential problem with contract terms and incentives in our agent agreements.”

Congrats, you made it through your first financial services case interview!

4 Tips On Acing Your Financial Services Case Interview

1. validate corporate structure and business model.

Always remember to validate the corporate structure and business model of the financial institution in your financial services case interview. You don’t want to end up confusing a commercial bank with an investment bank!

As a candidate, you’re not expected to know everything. Therefore, ask as many questions as possible to understand what you’re really dealing with. For instance, you could say, “Hey, I’m not familiar with the corporate structure and the business model of a pension fund, could you please explain that to me so I can start to understand the drivers of value for the business a bit better.”

2. Align on the Success Metrics

To be able to reach your destination, you must know what the destination is. This is especially relevant in the financial services case interview, where there could be dozens of metrics that can be solved for. Therefore, it’s critical to align on the North Star with your interviewer so you can solve for the target the client cares most about.

3. Apply First-Principles Thinking to Structure the Case

To navigate through a financial services case interview, you need to think on your toes. Chances are the corporate structure, business model, regulatory environment, and risk aspects will be unfamiliar to you. Instead of feeling bogged down by these nuances, take a big picture lens and apply first-principles thinking to structure the case.

You may not know the industry terms such as “net interest margin” or “dividend-adjusted return,” but you can always ask the first-principles question on “What drives value for the business?” and engage with your interviewer to identify the underlying sources of value.

Demonstrating intellectual curiosity in financial services cases will hold you in good stead. Start with “Why?” then get to the “What?” and only then solve for “How?”

4. Remain Calm and Confident

It’s easy to lose nerve when you’re out of your comfort zone. If financial services case interviews tend to throw you off, practice staying calm while solving the case. During your practice, monitor yourself for signs of nervousness. Pause, take a deep breath, smile, and then continue solving the case. The more practice you put in, the calmer your nerves will become. Also, include elements such as reading financial news, financial statements, etc., into your case prep so that you become familiar with industry terminologies. Incorporating these habits into your holistic practice will boost your confidence naturally.

– – – – –

In this article, we’ve covered:

• Key differences between financial services firms and other firms,
• Common types of financial services case interviews,
• A financial services case interview example, and
• 4 tips on acing your financial services case interview.

Still have questions?

If you have more questions about financial services case interviews, leave them in the comments below. One of My Consulting Offer’s case coaches will answer them.

Other people prepping for consulting case interviews found the following pages helpful:

• Our Ultimate Guide to Case Interview Prep
• Issue Trees
• Market-sizing Case Interview
• Supply Chain Case Interview

Help with Case Study Interview Prep

Thanks for turning to My Consulting Offer for advice on case study interview prep. My Consulting Offer has helped almost 85% of the people we’ve worked with to get a job in management consulting. We want you to be successful in your consulting interviews too. For example, here is how Julien was able to get his offer from Capital One.

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3 Top Strategies to Master the Case Interview in Under a Week

We are sharing our powerful strategies to pass the case interview even if you have no business background, zero casing experience, or only have a week to prepare.

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Secrets to a successful case-study interview

January 9, 2023

Prepping for (and maybe fretting) the case-study interview?

While this kind of interview may appear intimidating, consider this: The interviewer really wants you to do well.

So, shake off the nerves, relax and have fun.

Tips for standing out in the case-study interview: 

• Take your time; don't rush it.  Talk through the problem. If you can't make sense of it, take a moment and allow yourself some time to process what you've been missing. If you get stuck, get creative. Don't let yourself get bogged down; rely on your ingenuity. 
• Ask questions.  You can always ask your interviewer to define an acronym or to repeat or confirm details. If the interviewer asks, “How do we achieve success?”, don’t be afraid to ask, “What does ‘success’ mean to you? Is it turning a profit? Raising the company’s profile?” When you work on a client project, you need to ask questions to figure out what the problems might be, and the same applies here. The interviewer is your biggest asset in the room. They have the information you need to “solve the case” successfully. Use them wisely!
• Be flexible.  The focus of a case-study interview may vary. So, be prepared to participate in whatever discussion the interviewer has in mind. They may spend the first half of the interview asking about your previous experience, or they may dive right into the case study at the start. The bottom line: Be flexible, and be ready to discuss the work you do and how you do it.
• Use visual aids.  Don’t be afraid to use pen and paper, sketch out your thoughts, and talk through the problem at hand if it helps you get your ideas across. What matters most is demonstrating that you can solve problems.
• Focus on impact.  Inventory the information you have, and then dive in where you can have the most impact. Don’t forget to discuss your thought process and explain your assumptions.
• Tell a story.  Your experience has helped you progress in your career and education; use that experience. For example, in a business case study, you could bring your experience as a traveler to a case about a hypothetical airline. Your individuality is important. Your unique insights will serve you well when you’re interviewing.
• Pay attention to cues.  If the interviewer says something, it probably means something. Don’t dismiss seemingly extraneous details. For example, the interviewer might say, “The case is about a retailer who wants to increase the value of a company it purchased, and the owner loved the brand when growing up.” The purpose of that detail is to indicate that turning around and selling the asset is not an option for making it profitable, because the owner is attached to it.

Preparing for the job you want can take time, but it’s a worthwhile investment—especially when you receive an offer.

Your ideas, ingenuity and determination make a difference. 

Find your fit  with Accenture. 

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Case interviews: what finance concepts do I need to know?

Consultants use a wide range of financial concepts on their projects. Case interviews reflect real life examples and you will therefore come across financial concepts when you interview. These concepts range from fairly basic (E.g.: fixed costs) to more advanced (E.g.: return on investment).

The difficulty is that there is an endless list of financial concepts you could learn. But you do not have time to learn and master all of them and doing so should not be the objective of your preparation.

When you prepare for case interviews , you therefore need to ask yourself the following key question: What are the financial concepts I need to master to ace case interviews?

Click here to practise 1-on-1 with MBB ex-interviewers

The answer depends on the position you are applying for. In this blog post, we assume that you are interviewing for a general consultant, associate or manager role at a typical strategy firm (E.g.: McKinsey, BCG, Bain, etc). If you apply specifically to the financial services practice of the firms above, you will need to know more advanced financial concepts than we list below. But for general positions, here is the list of financial concepts you need to master:

• Fixed and variable costs

More advanced

• Return on investment
• Payback period

There is a very small chance that you might come across more exotic financial concepts in your case interviews. But in these cases you will not be expected to know the concept at hand. Instead, your interviewer will expect you to ask clarifying questions about the concept and will help you understand it.

There are three reasons why you do not need to know more financial concepts than the ones listed above:

• First, in our experience, these concepts will enable you to tackle 99% of the cases you will come across in your interviews
• Second, learning more concepts than this would be very time consuming. Instead you should use your time practicing on real case interviews
• Third, consultants themselves usually do not know more financial concepts than the ones we have listed. As a consequence if a more advanced concept is required for your case it is almost certain that your interviewer will help you understand it

Let us now define the concepts you need to know one by one.

We’ve already defined some basic financial concepts the video below. While McKinsey no longer uses the PST, these concepts are still useful to review.

Revenues, sales, or turnover (the three terms are synonyms) are the total amount of money that the company receives from customers by selling its products.

Let’s take an example. Imagine you work for an airline, such as British Airways. You sell plane tickets to your customers. The total amount of money you collect from customers in exchange for plane tickets (and any additional services you provide) is your company’s revenues.

There are two main ways you could be asked to calculate revenues for a company:

You might be given the number of products the company sold (the volume) and the average price of the products. From this, you can obtain revenues using the following formula: Revenues = Volume x Average Price.

Alternatively, you could be given the total sales in an industry (total market sales), and the share of the industry’s revenues represented by the company (the market share). The company’s sales would then be given by: Revenues = Total Market Sales x Market Share.

Either way, remember that revenues or sales are measured in terms of money (Dollar, Pound Sterling, Euro, etc.).

Costs, or expenses, are the total amount of money that the company pays to its various suppliers. In the case of the airline above, this will be the money that the company pays for fuel, leasing airplanes, the salaries of the crew, as well as expenses such as the cost of running their headquarters, their website, or even taxes and interest on loans.

As you can see, the term ‘costs’ covers many different items. Companies will be interested in tracking costs closely.

Fixed and variable costs: Businesses incur two types of costs. Variable costs are the costs that increase with higher sales or higher production. Fixed costs are the costs that would have to be paid regardless of how much is produced. In other words, variable costs change with the level of business activity, while fixed costs don’t.

Let’s imagine you are the CEO of a handbag manufacturer. The cost of the material you use to manufacture the bags is a variable cost: the more bags you produce, the more leather you will need. If one day you produce no handbag, then you don’t have to pay for any extra material. By contrast, the rent you pay for the store has to be paid every month, regardless of whether you sell or produce any bags that month.

As you may already appreciate, the distinction between fixed and variable costs is not always straightforward. For instance, labour costs can be either fixed or variable. As a CEO, your salary is a fixed cost as it will be paid independently of how many bags the company produces. However, during periods of peak production you might hire extra workers at your factory and their salary will therefore be a variable cost.

Even though these difficulties might arise, your interviewer will always allow you to determine easily from the context which cost is fixed and which is variable.

The most important relationship in business analysis is probably the following:

Profits = Revenues – Costs

Profits, also known as net income or net earnings, represents the money left to the owners or managers of the business after all expenses have been paid. Many questions in case interviews revolve around whether or not a company is profitable and what it should do to become more profitable.

Profits are always calculated over a certain period of time – either a quarter or a full year. If you are given fixed and variable costs, you would first have to calculate total costs over the period of time studied, before being able to calculate profits. For instance, in our handbag manufacturing example you would take all fixed costs for one year and add all variable costs for the production of that year to calculate total costs. Annual profits would then be given by subtracting total costs from annual revenues.

Given this definition of profits, there are two ways companies can increase their profits: increase revenues, or decrease costs. You can also see why it might not always be completely straightforward to compare the performance of two companies: one might have higher revenues but higher costs than the other.

4. Return on investment

Return on investment (ROI), or return on capital invested (ROCI), measures how much profits are generated by $100 invested in a given project or business. Let’s say you set up a lemonade stand with an initial investment of $1,000 to pay for a stand, a lemon press, etc. Let’s now assume that you sell $500 worth of lemonade throughout the year and that you incurred $400 in costs to make those sales (E.g.: lemons, sugar, electricity, etc). Your profit for the year is $100 and your return on investment is $100 / $1,000 = 10%.

The formula for return on investment is therefore given by:

Return on investment = Profits over given period / Initial investment

Returns on investment are expressed in percentages and calculated over a given period of time, usually one year. But nothing prevents you from calculating a daily or monthly return on investment. To do so, you just need to divide a day’s worth of profits or a month’s worth of profits by the initial investment. For a given project, profits made in a day are lower than profits made in a month or year, and the daily return on investment is therefore lower. In our example, assuming we make $100 / 365 = $0.27 of profits in a day, the daily return on investment is $0.27 / $1,000 = 0.027% which is lower than 10%.

Let’s focus on the initial investment part of the equation. In your case interviews , you will most likely have to calculate ROIs when a company is investing in a new project. Here, the initial investment will be the upfront expenses the company needs to make to start the business. For instance, if the company wants to start producing cars, building the car factory will be the main initial investment. Similarly, if the company wants to start a supermarket, the main initial investment will be the building, fridges and shelves to set up the supermarket (assuming it buys the building). Initial investments are typically only incurred once, at the beginning of the project.

Finally, there are two ways to increase ROIs: growing profits or decreasing the initial investment. Sometimes, the return on investment for a project will be negative. This indicates that profits are negative and that the project is losing money.

5. Payback period

Payback period measures how much time it takes to earn back your initial investment. In our lemonade stand example, it takes 10 years of profits at $100 per year to pay back the initial investment of $1,000. The payback period is 10 years.

The formula for payback period is therefore given by:

Payback period = Initial investment / Profits over a given period

Payback periods are usually expressed in years by dividing the initial investment by the profits per year . But notice that they can also be expressed in days or months too simply by dividing the initial investment by the profits per day or the profits per month .

Finally, notice that the payback period is simply the inverse of the return on investment. In our lemonade stand example, the yearly return on investment was 10%. To calculate the payback period we could have simply done 1 / 10% = 10 years. Again, in some cases the payback period will be negative which indicates negative profits and that the project is losing money.

Mock interviews

The best way to improve at case interviews is to practise interviewing out loud, and you can do that in three main ways:

• Interview yourself (out loud)
• Practise interviewing with friends or family
• Practise interviewing with ex-interviewers

Practising by yourself is a great way to get started, and can help you get more comfortable with the flow of a case interview. However, this type of practice won’t prepare you for realistic interview conditions. 

After getting some practice on your own, you should find someone who can do a mock interview with you, like a friend or family member.

We’d also recommend that you practise 1-1 with ex-interviewers from top consulting firms . This is the best way to replicate the conditions of a real case interview, and to get feedback from someone who understands the process extremely well.

Click here to book your mock case interview.

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Finance Case Study Example | Finance Interview Technical Questions

Written by abc audio all rights reserved on february 23, 2022.

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Related Financial Modeling Videos: ► Finance Interview Prep Series | Crush Your Interview: http://bit.ly/fin_intervw_prep ► Build a 3 Statement Financial Model: https://youtu.be/xlXDZyZ9azk ► Demystifying the Cash Flow Statement: https://youtu.be/BS6_RsuqzwE ____________________________________________

One of the quickest and most common ways to evaluate candidates for analyst roles is to give them a finance case study during an interview. Case studies force us to both crunch the numbers quantitatively to demonstrate our knowledge but also think about the big picture and make recommendations – they are a lot of fun!

For these reasons, they are common in technical finance interviews, university projects, MBA programs, etc.

In this video, I help you solve a finance interview case study for a software platform that is considering a revenue share partnership with another company – this is the type of case study would be common at a FAANG or big tech company.

All case studies start the same way – they present you with a set of facts during some pivotal moment at a company where they are trying to decide whether they want to do some new thing (be it internally, or externally).

Regardless of the specifics – all case studies in finance are effectively asking you to do the same thing – build a simple income statement, differentiate COGS vs. OPEX expenses, calculate the depreciation for a CAPEX investment, and evaluate cash vs. accrual accounting payback period.

At the end, you are expected to synthesize your analysis into an open-ended recommendation about what the company should do.

Now that you understand the basic format of finance case studies, let’s walk through this example where I help you develop a framework of ideas to analyze situations with.

1:04 finance case study model setup (all case studies are basically asking the same info) 3:55 building the income statement & analyzing margins 10:50 calculating depreciation schedule for CAPEX 16:15 cash flow analysis & payback period vs. p&l 18:12 key quantitative metrics for making a case study recommendation 21:10 key qualitative metrics for making a case study recommendation 24:36 my finance case study recommendation

By the end of this video, you will understand how to approach finance case studies, crunch the numbers, and make recommendations in your future interviews – I guarantee it!

If you have questions – please leave a comment below and I’ll try to help. Cheers!

► Subscribe for more finance videos: https://bit.ly/EricAndrewsSubscribe

#financecasestudy #financeinterviews #saas

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Interview Questions: The Financial Case Interview

Published: Mar 10, 2009

Case interviews aren't just for consultants any more. Many investment banks give questions that could, under other circumstances, be called case interviews--they often involve both strategy and quantitative know-how. The best way to prepare for any interview is to prepare. Here is one such question.

What is a company that you follow closely? Is it a good investment?

Tell your interviewer you would look at various criteria to determine if it's a worthwhile investment, including:

• Earnings growth: Determine how fast the company's earnings are expected to grow, looking at the following factors (among others): the company's historic growth rate; earnings growth rates of other companies in the industry; growth rate of the market the company services; analyst estimates; and perhaps building your own financial model in Excel to test various assumptions.
• Industry analysis: Evaluate the industry the company is in to determine whether this is an attractive industry in which to invest. Look at factors including: how rapidly the industry is growing; whether the industry is consolidating; how intense the competition is among competitors; whether market players have pricing power; and whether products are considered commodities.
• Competitive advantages: Evaluate whether the company has any competitive advantages over its competition, such as patents, exclusive contracts, a differentiated product, brand equity, a lower cost structure, or superior management.
• Valuation: Given its prospects, is the company a good value? You would compare the company's expected earnings growth to various valuation measures, like price-to-earnings ratio, price-to-sales ratio, and price-to-book-value. You would also compare these valuation measures to other companies in the industry to determine whether the company is relatively expensive or relatively affordable.
• Portfolio considerations: Finally, you would want to determine whether an investment in the company fits well with your overall portfolio and objectives. You would want to ask questions like: Does the company help diversify risk in your portfolio? Does the company meet your portfolio's risk profile?

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Finance Interview Questions and Answers (44 Samples)

Common finance technical, behavioral, and logical questions with sample answer

Austin has been working with Ernst & Young for over four years, starting as a senior consultant before being promoted to a manager. At EY, he focuses on strategy, process and operations improvement, and business transformation consulting services focused on health provider, payer, and public health organizations. Austin specializes in the health industry but supports clients across multiple industries.

Austin has a Bachelor of Science in Engineering and a Masters of Business Administration in Strategy, Management and Organization, both from the University of Michigan.

Prior to becoming our CEO & Founder at Wall Street Oasis, Patrick spent three years as a Private Equity  Associate for Tailwind Capital  in New York and two years as an Investment Banking Analyst at Rothschild.

Patrick has an  MBA  in Entrepreneurial Management from The Wharton School and a BA in Economics from Williams College.

10 Basic Finance Technical Interview Questions

5 advanced finance technical interview questions for professionals / mba candidates, 5 investment banking interview questions, 5 private equity interview questions, 5 hedge funds interview questions, 5 equity research interview questions, 5 accounting interview questions, 4 logical puzzles - interview brain teasers, wso interview prep guides & additional resources.

You’re just starting the finance recruiting season. You’re an undergrad that needs to ace their finance job interviews. But, possibly, you’ re an MBA student that needs to land that top-notch offer at your dream private equity firm.

Most importantly, you’re in luck! 

We’ve compiled a list of the most common and frequently asked finance interview questions across various career paths, from investment banking and private equity to equity research and accounting !

If you want to ace your finance interview , make sure you review and perfect the answers to the questions below. 

This guide is based on real questions asked at banks and is curated from Wall Street Oasis (WSO) global community with over 900,000 members that have been in your shoes.

In addition to this comprehensive guide to finance interview Q&A, you might also want to arm yourself with the complete Investment Banking Interview Prep Package and perfect your interview skills with some Mock Interviews with Experienced Wall St. Mentors .

Check out the full list of awesome Interview & Recruiting Prep Courses from WSO for more information.

For now, if you’re looking for just the basic fresher on Finance Interview questions, look no further!

This guide features a total of 44 of the most common technical, transactional, behavioral, and logical questions, as well as proven sample answers to them, that are asked in finance interviews to candidates during the hiring process.

We have also added links to our very own WSO free complete interview guides at the end of each section, so you can further tailor your training for the role you’re applying for and convert the interview into an offer!

This interview guide consists of 9 sections, starting with a section on general finance questions, followed by sections covering questions (technical and behavioral) for the respective job you’re applying for.

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A candidate’s technical abilities and expertise are assessed critically in almost every finance recruiting and interview process. 

Your interviewers expect detailed and accurate responses to general finance questions, often asked in the beginning stages of the interview. Your answers must demonstrate technical mastery and expertise of the topic at hand.

The following section features 15 common finance interview questions for undergraduates and students and experienced professionals and MBA candidates. At the end of each question, we also provide a sample answer.

We feature the career-specific technical and behavioral questions sections to further tailor your training towards the role you’re applying for at the end of these 15 questions.

1. What are the four financial statements?

Sample Answer: The four financial statements are,

• Income Statement,
• Balance Sheet,
• Statement of Cash Flows , and
• Statement of Stockholders’ Equity

2. How are the three main financial statements connected?

Sample Answer: The three main financial statements are, 

• Income Statement
• Balance Sheet, and
• Statement of Cash Flows

They are connected as follows:

• Net income flows from the Income Statement into the Cash Flow from Operations on the Cash Flow statement
• Net income reduced by dividends are added to retained earnings from the prior period’s Balance Sheet to arrive at retained earnings as on the current period’s Balance Sheet
• Beginning cash on the Cash Flow Statement is cash from the prior period’s Balance Sheet and Ending cash on the Cash Flow statement is cash on the current period’s Balance Sheet

The following comprehensive chart summarizes the connections between the three main financial statements:

3. Briefly walk me through the Income Statement.

Sample Answer: The first line of the Income Statement represents revenues or sales. From that, we subtract the cost of goods sold , which equals gross margin . 

Subtracting operating expenses from gross margin gives us operating income ( EBIT ). We then subtract (add) interest expense (income), taxes (refunds), and other expenses (income) to arrive at Net Income.

4. What is EBITDA?

Sample Answer: EBIDTA stands for Earnings before Interest, Depreciation, Taxes, and Amortization. 

It allows us to gauge a rough estimate of a company’s profitability and is often a quick substitute for free cash flow . It allows you to determine how much cash is available from operations to pay interest, CAPEX , etc.

It can be calculated using the simplified formula of EBITDA = Revenue - Expense. Lastly, EBITDA is also used in rough valuation as a metric, such as EV/EBITDA.

5. What are the ways you can value a company?

Sample Answer: Some common valuation techniques are,

• Comparable Companies / Multiples Analysis
• Discounted Cash Flow ( DCF )
• Leveraged Buyout Model ( LBO )
• Precedent Transactions
• Liquidation Valuation
• Market Cap/Market Valuation

6. What is Enterprise Value?

Sample Answer: Enterprise Value (EV) is the value of the entire firm, inclusive of debt and equity. In the event of acquisition without a premium, it represents the price that would be paid for the company by the acquirer. 

The formula for EV is,

EV = Market Value of Equity + Debt + Preferred Stock + minority interest - Cash

7. Can a company have a negative book equity value?

Sample Answer: Yes, a company can have a negative book equity value . Possible situations where this would occur are when there are large cash dividends or if the company has been operating at a loss for a long time, leading to taking on debt to stay operational.

8. What is WACC, and how do you calculate it?

Sample Answer: WACC stands for Weighted Average Cost of Capital . It reflects the cost of the company raising new capital and reflects the riskiness of a company.

9. When do you use an LBO model?

Sample Answer: LBO models are used when the firm uses a higher than normal amount of debt to finance the purchase of a company, then uses the company’s cash flows to pay off the debt over time. 

In addition, the acquisition’s assets may be used as collateral. Ideally, the acquisitions debt has been partially retired at the exit.

10. What is Beta?

Sample Answer: Beta is a measure of the volatility of an investment relative to the market as a whole. We consider the market to have a beta of 1; investments considered more volatile than the market have a beta greater than 1, whereas contrasting investments less volatile have a beta of less than 1.

These are questions also asked for junior-year Summer Analyst , full-time Analyst, and MBA job interviews. These advanced finance questions require deeper thinking and understanding of corporate finance .

1. What are some possible reasons why a company would issue equity rather than debt to fund its operations?

Sample Answer: The company may decide to issue equity rather than debt for a variety of reasons, some of which are,

• The company considers its stock price to be inflated, and therefore it can raise a large amount of capital compared to the percentage of ownership sold
• The projects the company plans to invest in with proceeds may not produce immediate or consistent cash flows to pay the debt
• The company wants to adjust the cap structure or pay down debt
• The owners of the company want to sell off a portion of their ownership

2. What are the major factors that drive mergers and acquisitions?

Sample Answer: Some major factors that potentially drive mergers and acquisitions are,

• Diversification or sharpening on the market, or products of the company
• Implementation of new technologies
• Achieving synergies (cost savings)
• Eliminating a competitor from the market or growing market share
• Increase in supply-chain pricing power by buying a supplier or distributor
• Improvement of financial metrics

3. How is it possible for a company to have a positive net income but go bankrupt?

Sample Answer: The company may go bankrupt with a positive net income if working capital erodes (increasing accounts receivable and lowering accounts payable ). It is also worth noting that financial fraud can also be a possibility.

4. How/ Why do you lever or unlever beta?

Sample Answer: When beta is unlevered, the financial effects of debt in the capital structure are removed. This will help you analyze the risk of a firm’s equity compared to the market. 

Further, when you are valuing a company that is not on the market and doesn’t have a beta, you can compare it to a similar company on the market and unlever its beta as a proxy for the unlisted company’s beta.

5. What is the difference between cash-based accounting and accrual?

Sample Answer: Cash-based accounting recognizes sales and expenses when cash flows out of the company. Accrual-based accounting recognizes revenues and expenses as incurred regardless of whether cash flows out of the company at that exact time. In the finance industry, accrual-based accounting is the more popular method.

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WSO’s Free 101 Investment Banking Interview Guide

All of the above questions have been taken from our WSO official free Investment Banking Interview Questions and Answers page. 

The guide features 101 of the most common technical, behavioral, logical, and group-specific questions that investment banking professionals ask candidates during the hiring process, as well as sample answers to each one of them. 

The resource includes 21 bank-specific questions from bulge bracket investment banks (Goldman Sachs, J.P Morgan, Citi, etc.).

Investment Banking (IB) remains one of the most sought-after jobs for recent graduates and professionals alike in the finance industry. Bulge bracket investment banks such as Goldman Sachs have reported 2% IB internship acceptance rates in 2013, and the number has likely only decreased since then.

With that being said, it comes as no surprise that the investment banking interview process is highly competitive and designed to rigorously filter out potential candidates. Consequently, answering the behavioral, technical, and logical questions that are asked in the interview with proven answers that we provide is key to converting an interview into an offer.

The following section features five questions (4 technicals + 1 behavioral) to kickstart your training for investment banking interviews . It is a great place to start before checking out our free comprehensive Investment Banking Interview Questions and Answers page.

1. Which valuation methodologies result in the highest valuations?

Sample Answer: The following list ranks the four valuation methodologies from highest valuation to lowest valuation:

• Precedent Transaction - Since a company will pay a control premium and a premium for synergies arising from the merger , values tend to be high.
• Discounted Cash Flow - Those building the DCF model are frequently optimistic in their projections. 
• Market Comps - Based on other similar companies and how they are trading. There are no control premiums or synergies.
• Market Valuation - Based on how the market is valuing the target. This only accounts for equity value, no premiums or synergies.

2. What does an investment banking division do?

Sample Answer: The investment banking division is sometimes referred to as corporate finance and is broadly split into two sectors, products and industries. Both sectors service the purpose of providing advisory on transactions, mergers, and acquisitions and arranging (and sometimes even providing) financing for these transactions.

Investment banking product groups are broken down into

• Mergers and Acquisitions (M&A): Advisory on sale, merger, and purchase of companies.
• Leveraged Finance (LevFin) - Issuing high-yield debt to firms to finance acquisitions and other corporate activities.
• Equity Capital Markets (ECM) - Advice on equity and equity-derived products ( IPOs , shares, capital raises, secondary offerings, etc.)
• Debt Capital Markets (DCM) - Advice on raising and structuring debt to finance acquisitions and other corporate activities.
• Restructuring – Improving the structures of a company to make it more profitable or efficient.”

*Taken from WSO’s “ What is Investment Banking .”

3. If enterprise value (EV) is $80mm, and equity value is $40mm, what is the net debt?

Enterprise Value = Equity Value + Net Debt + Preferred Stock + Minority Interest

Sample Answer: If we assume there is no minority interest or preferred stock, the Net Debt will be $80mm – $40mm, or $40mm.

4. All else equal, should the WACC be higher for a company with a $100 million market cap or a $100 billion market cap?

Sample Answer 1: Typically, we consider the larger company to be “safer” and consequently should have a lower WACC, all other factors being equal. However, depending upon their respective capital structures, the larger company may potentially also have a higher WACC.

Sample Answer 2: Without knowing more information about the companies, this is impossible to say. If the capital structures are the same, the larger company should be less risky and therefore have a lower WACC. However, if the larger company has a lot of high-interest debt, it could have a higher WACC.

5. Why do you believe you will be a competent investment banking analyst?

Highlight three to four of the following points:

• Positive attitude
• Quantitative and analytical skills
• Team spirit
• Communication ability
• Eagerness to learn
• Appetite for work
• Efficiency of organization
• Detail orientation
• Ability to get everything done with a smile

Sample Answer: To be a successful analyst, you have to be well-rounded. But, of course, no single quality makes a good analyst. Still, I think three characteristics are probably most important: maintaining a positive attitude, being extremely hard-working, and knowing how to be a strong team player.

Professionals often consider Private Equity (PE) one of the hardest sectors to break into within the finance industry.

Nevertheless, vast amounts of talented professionals from various backgrounds (investment banking, asset management , etc.) apply to private equity firms, seeing them as the golden exit opportunity due to generally better pay and better hours. 

Therefore, the competitive interview process is designed to rigorously filter out potential candidates, with less than 1% of candidates receiving job offers.

The following section features five questions (4 technicals + 1 behavioral) to kickstart your training for private equity interviews . It is a great place to start before checking out our free comprehensive Private Equity Interview Questions and Answers page.

1. How would you successfully close a deal if you and the seller disagree on the price of an asset due to different projections of its future operating performance?

Sample Answer: A classic PE solution to this common problem is an “Earn-out.” This is because sellers are typically more optimistic about a business’s future performance than what PE investors are willing to underwrite. 

In such instances, either party may propose that the sellers are paid a portion of the total acquisition price up-front. In contrast, a portion is held back (frequently in an escrow account) until the business’ actual future performance is determined.

If the business performs in line with the seller’s expectations, then the seller is paid the remainder of the purchase price some months or years after the close of the deal. However, if the business under-performs the seller’s expectations, the buyer keeps some or all of the earn-out money. 

This type of structure is a common way of bridging valuation gaps between buyers and sellers.

2. What are some common methods PE firms use to increase portfolio company value?

Sample Answer: How much value PE firms add is an open question, but the following methods are frequently mentioned:

• Recruit more competent management and board members
• Provide more aligned management incentives ( typically via stock option pool)
• Identify and finance new organic growth opportunities (new geographies, product lines, adjacent market verticals, etc.)
• Find, finance, and execute add-on acquisitions
• Foster stronger relationships with key customers, suppliers, and Wall Street
• Support investment in better IT systems, financial reporting and control, research & development, etc.

3. What are some pros and cons of market value?

Sample Answer: Pros:

• Market value is always up-to-date and is instantly available for public companies .
• Market value is determined by and fundamentally based on the individual decisions of numerous investors, therefore reflecting the collective work and judgment of people.
• The market can be wrong, sometimes by a considerable margin. If it wasn’t, hedge funds and other public market investors (Warren Buffett) would seldom beat the market.

4. Tell me why each of the financial statements by themselves is inadequate for evaluating a company?

Sample Answer: There are many reasons why each of the financial statements is inadequate for evaluating a company. A few reasons for each one are listed below.

• Income Statement : The income statement alone won’t tell you whether a company generates enough cash to stay afloat or solvent. You need the balance sheet to tell you whether the company can meet its future liabilities, and you need the cash flow statement to ensure it is generating enough cash to fund its operations and growth.
• Balance Sheet: The balance sheet alone won’t tell you whether the company is profitable because it is only a snapshot on a particular date. For example, a company with few liabilities and many valuable assets could be losing a lot of money every year.
• Cash Flow Statement : The cash flow statement won’t tell you whether a company is solvent because it could have massive long-term liabilities which dwarf its cash-generating capabilities.

The cash flow statement won’t tell you whether the company’s ongoing operations are profitable because cash flows in any given period could look strong or weak due to timing rather than the underlying strength of the company’s business.

5. Why are you interested in X PE Firm?

The interviewer wants to make sure that you are truly serious about their firm and that there is likely to be a good fit between you and the firm. 

Therefore, your goal should be to demonstrate your clear interest by showing you’ve spent time researching the firm and have specific reasons to be interested in it.

Before you go into an interview, dig up some of the basic information about it:

• Its origin, age, fund size, office locations, industry focus, investment criteria, etc.
• Bios of some of it investment professionals, especially those likely to interview you
• Existing and past deals/portfolio companies
• How they describe themselves / how they see themselves / what makes their investment process or culture unique

Great resources for learning the above include:

• The firm’s website is first and foremost. It frequently has an “about the firm” section, IP bios, investment criteria, existing portfolio, and past deal examples or case studies
• CapIQ and other similar data providers also frequently have some of the above data
• Google the company’s name for news articles, especially press releases on new investments and exits
• Search for WSO threads about the company and read the WSO database entries on the company
• If you have friends who work there or have worked there - they can, of course, be a great resource

WSO’s Free PE Interview Guide

All of the above questions have been taken from our WSO official free Private Equity Interview Questions and Answers page. 

The guide features a total of 40 of the most common technical, transactional, behavioral, and logical questions, along with proven sample answers that private equity professionals ask candidates during the hiring process. 

We have also added dedicated sections discussing previous deal experiences and featured a free LBO modeling test (video solution + modeling file) at the end of the guide to perfect your modeling skills!

Hedge Funds are one of the main movers of global markets and key influencers of global liquidity. With the lucrative bonus packages offered by hedge funds, it is not uncommon to hear hedge fund analysts in their mid-to-late-twenties making well into the half-million-dollar range per year or more. 

Given this, it comes as no surprise that hedge funds are extremely selective with their hiring process, as they rigorously filter out thousands of potential applications annually to settle for only the best.

The following section features five questions (4 technicals + 1 behavioral) to kickstart your training for hedge fund interviews . It is a great place to start before checking out our free comprehensive Hedge Funds Interview Questions and Answers page.

1. What’s the difference between intrinsic and book value, and how can they deviate?

Sample Answer:

• Book value is what assets are carried out on a company’s balance sheet. Book value and Price to Book are common valuation measures for value-conscious investors.
• Intrinsic value is the belief of what a business is truly worth.
• The intrinsic value would consider intangible assets not properly valued or carried on the balance sheet – like the brand value of Coca-Cola.
• Additionally, sometimes when a holding company acquires a portfolio company, it is carried at cost on the balance sheet, and its value won’t be “written up” to its intrinsic value over time as the company grows.
• However, companies must write down intangible assets that lose value as per accounting standards.

2. What are Deferred Tax Assets (DTA) and Deferred Tax Liabilities (DTL)? How are they created in an M&A transaction?

• A DTL occurs when the company has paid fewer cash taxes than it owes therefore compensated for by paying additional taxes to the government sometime in the future.
• A deferred tax asset occurs when a company pays more taxes to the government than they show as an expense on their income statement in a reporting period.
• DTAs and DTLs are often created in an M&A transaction through the write-up or write-down of assets.
• If an asset is written up, the company will record a profit, and a DTL is created as the new asset will hold a higher depreciation expense in the short term, translating into the company paying lower taxes. These taxes must be paid back at some point, which is why liability is created.
• The opposite is true when an asset is written down in value.

3. Let’s suppose implied volatility (IV) for security is extremely high. Why could this be, and how would you profit from this?

• Implied volatility represents the expected volatility in a security and potentially may be high during times of company-specific events like earnings or due to volatility in the broader sector or market during a correction.
• You can chart a security’s implied volatility to see where it stands relative to historical levels.
• Suppose you believe that implied volatility is overstated for a company’s options. In that case, you should sell the one with the higher premium that is expected to fall, therefore allowing you to (1) Cover at a lower IV and lower price or (2) Hold your option trade through expiration and let them expire.
• You can sell premium by shorting calls or shorting puts, depending on if you have a view on the direction in the security. You could also write covered calls or short a straddle. A short straddle is writing puts and calls at the same strike and betting that the underlying security won’t move as much as the market expects by expiration. In other words, realized volatility will be less than what’s priced in.

4. What are typical default rates for high-yield bonds? What are typical recovery rates for these bonds? What impacts their recovery?

• The historical average default rate for high-yield bonds is just under 5%. 
• Historically, it has doubled to around 10% in times of distress around recessions.
• The 1-year default rate for a bond that is already distressed is slightly higher at 15-20%.
• The recovery rate for a distressed bond depends on where a bond falls in the capital structure compared to other creditors. The higher the seniority, the greater the chances of recovering debt. The recovery rate has historically been around 40% for senior unsecured debentures. The type of recovery also impacts the recovery rate – Bankruptcy or distressed exchange. Distressed exchanges have had better recovery rates lately. Recovery rates are published annually by the credit rating agencies.
• Recently, distressed bonds have had better recovery rates, especially in energy defaults.

5. What’s the single most impressive experience on your resume?

Have one experience in mind that you feel is most impressive to the position you are applying for, and talk about it in depth. Then, explain the important facets of the experience and how they relate to the job you are applying for.

Sample Answer: “The most impressive experience on my resume was my experience last year as an intern at a hedge fund after my sophomore year. As the only intern at the firm, I effectively managed multiple tasks from multiple bosses. As a result, I learned throughout the summer how to accomplish everything asked of me efficiently and accurately. 

I took on tasks such as some basic modeling of a company’s projected revenues based on different drivers and qualitative analysis of a few different industries, putting together PowerPoint presentations for the senior members of the team. 

Even though I was just an unpaid intern, I was considered an integral part of the team and was expected to work long, intense hours, which gave me a feel of what I should be expecting as I enter the workforce.”

WSO’s Free Hedge Fund Interview Guide

All of the above questions have been taken from our WSO official free Hedge Funds Interview Questions and Answers page. 

Our guide features a total of 40 of the most common technical, behavioral, and logical questions, along with p roven sample answers , that are asked by hedge funds professionals to candidates during the hiring process. 

This resource includes 13 firm-specific questions from leading hedge funds (Bridgewater Associates, Citadel, etc.) and proven sample answers.

Equity Research (ER) attracts seasoned professionals and new hires with various talents and diversified skill sets across the world for a fulfilling career. New hires starting right out of school will start as research associates and move up the chain to becoming research analysts after gaining experience in the industry.

Given the limited number of positions for an incredibly large amount of applicants, it is no surprise that the interview process is designed to be incredibly competitive.

The following section features five questions (4 technicals + 1 behavioral) to kickstart your training for equity research interviews . It is a great place to start before checking out our free comprehensive Equity Research Interview Questions and Answers page.

1. How do you value a private company?

• You cannot use a straight market valuation as the company is not publicly traded.
• A DCF can be complicated by the absence of an equity beta, which increases the difficulty of calculating WACC . In such a situation, you have to use the equity beta of a close comp in your WACC calculation.
• Financial information for private companies is relatively harder to obtain because they are not required to make public online filings.
• An analyst may apply a discount on a comparable company’s valuation if the comps are publicly held because a public company will demand a 10-15% premium for the liquidity an investor enjoys when investing in a public company.

2. What is the market risk premium?

Sample Answer: The market risk premium is the excess return that investors require for choosing to purchase stocks over “risk-free” securities. It is calculated as the average return on the market (normally the S&P 500, typically around 10-12%) minus the risk-free rate (current yield on a 10-year Treasury).

3. When should an investor buy preferred stock?

• Preferred stock could be looked at as a cross between debt and equity. It will normally provide investors with a fixed dividend rate (like a bond) and allow for some capital appreciation (like a stock). 
• Preferred stock may also have a conversion feature that allows shareholders to convert their preferred stock into common stock .
• It typically does not have voting rights like those of common stock.
• It is senior to common stock within the company’s capital structure.

Sample Answer: An investor should buy preferred stock for the upside potential of equity while limiting risk and assuring stability of current income in the form of a dividend. Preferred stock’s dividends are more secure than those from common stock.

In addition, owners of preferred stock enjoy a superior right to the company’s assets, though inferior to those of debt holders, should the company go bankrupt.

4. When should a company buy back stock?

Sample Answer: A company should buy back its stock if it believes it is undervalued when it has extra cash or wants to increase its stock price by increasing its EPS by reducing outstanding shares or sending a positive signal to the market.

However, if it believes it can make money by expanding its operations, it might not be a good idea to buy back stock. Also, a stock buyback is the best way to return money to shareholders, as they are tax-efficient compared to dividends.

5. What makes you think you can put up with the stress, pressure, and long hours of a career in finance?

Tell a story of a time in your life when you managed many different tasks and worked long hours. 

The story can be from school, work, home, or a combination of all of them. 

For example, maybe during finals week, you wrote three papers while studying for two exams, finalizing the school newspaper, and still going to soccer practice.

Make sure to explain that you know your experience has not been as intense as what you will face as a finance professional. Still, you feel as well prepared as anyone, and you are 100% dedicated to succeeding, whatever it takes.

Sample Answer: “I genuinely feel I am as prepared as anyone else coming out of college to handle the long hours. When you add up all the time I spent doing all my different activities, school hours were almost as long.

Every day I was up at 7:30 for classes that ran from 8:15 until 1:00. Then, after class, I would grab lunch and then go to soccer practice, which meant I didn’t get back until 5:00. 

Then I would grab dinner and work in either my room or the library until I was done, which usually wasn’t until pretty late at night or into the morning. So while I know it isn’t the same stress and time commitment as finance requires, I feel my experience has left me well prepared.”

WSO’s free Equity Research Interview Guide

All of the above questions have been taken from our WSO official free Equity Research Interview Questions and Answers page. 

Our guide features a total of 40 of the most common technical, behavioral, and logical questions, along with proven sample answers , that are asked by hedge funds professionals to candidates during the hiring process. 

This resource includes eight firm-specific questions from leading hedge funds (Point72, D.E. Shaw Group, etc.) and proven sample answers .

Accounting has been considered the benchmark for a stable and growing career path in the vast world of finance for decades now.

Therefore, it establishes itself as a compelling career prospect for various professionals, from individuals looking for long-term job security to professionals beginning their career at a Big Four accounting firm before lateraling to other financial fields, such as investment banking or private equity.

The competitive interview process seeks to identify and reward well-equipped applicants with strong technical and financial skills as well as good attention to detail.

The following section features five questions (4 technical + 1 behavioral) to kickstart your training for accounting interviews . It is a great place to start before checking out our free comprehensive Accounting Interview Questions and Answers page.

1. What is the purpose of the changes in the working capital section of the cash flow statement?

Sample Answer: Due to accrual accounting, certain non-cash items affect both the income statement and balance sheet, examples of which are accounts payable and accounts receivable. Therefore, to reverse the effects of the non-cash items, we adjust for them in the “Changes in working capital” section.

Sample Follow-up Question: What does it mean if your change in net working capital is negative on the statement of cash flow? Is negative working capital a bad thing for a company? 

Sample Follow-up Answer: While negative working capital by pure definition (i.e., current liabilities > current assets ) may indicate a solvency issue for a company or an inability to satisfy its obligations, negative working capital may not necessarily be considered a bad thing. 

Suppose a company is making a concerted effort to stretch out its payment terms with its vendors as much as possible to preserve its cash position (which is not included in the calculation of working capital).

In that case, this will lead to negative working capital (since Accounts Payable would likely cause an excess of current liabilities over current assets). The company still has the liquidity to satisfy its obligations, but stretching out the vendor payment provides the company with the most flexibility.

2. What is the difference between accounts payable and accrued expenses?

Sample Answer: Accounts payable and accrued expenses are fundamentally similar. The main difference is that accounts payable is typically a one-time expense with an invoice (such as the purchase of inventory).

In contrast, accrued expenses are recurring (like employee expenses). It is worth noting that both accounts are reflected in working capital calculations.

3. What is a deferred tax liability, and why might one be created?

• Deferred tax liability is a tax expense amount reported on a company’s income statement, although not actually paid in cash during that accounting period but expected to be paid in the future. This occurs when a company pays fewer taxes to the government than they show as an expense on their income statement.
• This can be caused due to differences in depreciation expense between book reporting ( GAAP ) and tax reporting. This will lead to differences in tax expenses reported in the financial statements and taxes payable to the government.

4. Give some examples of accounting events typically involved in compound entries.

Sample Answer: Examples of such accounting events would be:

• Bank deductions which are associated with a bank reconciliation
• Deduction of expenses related to payroll payments
• Sales transactions subject to sales tax 

5. Discuss your mathematical and quantitative skills relative to what a career in accounting requires.

You will need to be comfortable with numbers, generate formulas, and perform calculations using Excel.

It is beneficial to talk about how you have managed your portfolio, completed a self-study modeling course , took the accounting or finance courses offered at your school, etc.

Sample Answer: Although I majored in English, I have had an independent interest in accounting since I interned at a Big Four accounting firm in my first year of university.

Ever since I completed that project, I have managed my portfolio of limited savings, investing in companies that I view as safe, long-term growth plays through simple fundamental analysis . As a result, I have achieved an average annual return of 15% on my portfolio over four years.

WSO’s Free Accounting Interview Guide

All of the above questions have been taken from our WSO official free Accounting Interview Questions and Answers page. 

Our guide features a total of 33 of the most common technical, behavioral, and logical questions, along with proven sample answers . 

This resource further includes 12 firm-specific questions from the big four accounting firms (Deloitte, KPMG, etc.) and proven sample answers to them.

Finance interviews also generally consist of a component dedicated to testing the logical thinking abilities of the candidate, which are indicative of their performance on the job later on.

Logical puzzles, brainteasers , and riddles have cemented themselves as important components of the interview process due to their nature, allowing the interviewer to determine your critical thinking abilities.

It is worth noting that for this section of the interview, interviewers aren’t focused on whether you get the right answers or not. Rather, they are interested in your thought process while solving the riddles you are presented with.

Given this, it is key to walk your interviewer through your thinking as you progress through the riddle, who may even probe you with questions to assist you. Giving them a rundown of your thoughts and occasionally asking if you’re headed in the right direction demonstrates your capabilities to reflect and approach a problem with composure.

However, it is still extremely useful to anticipate these logical puzzles beforehand to avoid being put on the spot and caught off guard in the interview. The following section has four commonly asked logical puzzles that you can prepare beforehand to impress your interviewer.

1. What’s 17 squared? What’s 18x22?

Answer: Don’t worry; they want to know how you will handle this question, and it is not difficult if you think about it correctly.

• Think 17 x 17 is just 17x10 plus 17x7. You know, 17 x 10 is 170. Now17 x 7 is 10 x 7 and 7 x 7. This gives you 170 + 70 + 49, or 289. Whatever you do, don’t panic!
• Now see if you can do 18 x 22: 18 x 20 + 18 x 2. Easy, 360 + 36 = 396.
• As far as brainteasers go, this is a rather common one. You will do better if you have practiced these types of questions.

2. A stock is trading at 10 and 1/16. There are 1 million shares outstanding. What is the stock’s market cap?

Answer : This is just a test of your mental math. If a fourth is .25, an eighth is .125, and a sixteenth is .0625. The stock price is 10.0625, and the Market Cap is 10.0625 million.

3. What is the probability that the first business day of the month is a Monday?

Answer: Each day has a 1 in 7 chance of being the first day of the month. However, if the month starts on a Saturday or a Sunday, the first business day of the month will be a Monday.

Therefore, the chances of the first business day being a Monday is 3 in 7 since if the month starts on Saturday, Sunday, or Monday, the first business day is a Monday.

4. A car drives from point A to point B at 60 MPH. It then returns from point B to point A at 30MPH. What is the average speed of the total round trip?

Answer: A lot of people say 45mph, which is wrong. Average speed equals total distance over total time. In this case, let’s assume the distance between A and B is 60 miles.

The first leg of the journey takes one hour, and the return trip takes 2 hours. Therefore, the total distance traveled is 120 miles, and the total time the trip takes is 3 hours. Therefore, the average speed of the round trip is 120 miles / 3 hours = 40mph.

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• WSO Salary Guides for Finance and Business
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Additional interview resources

To learn more about interviews and the questions asked, please check out the additional interview resources below:

• Investment Banking Interview Questions and Answers
• Private Equity Interview Questions and Answers
• Hedge Funds Interview Questions and Answers
• FP&A Interview Questions and Answers
• Accounting Interview Questions and Answers

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Hacking the Case Interview

Although case interviews do not require any technical math or finance knowledge, there are basic formulas that you should know in order to do well in order to master case interview math .

This article will cover the 26 formulas you should know for case interviews. These formulas are organized into the following categories:

• Profit Formulas
• Investment Formulas
• Operations Formulas
• Market Share Formulas
• Accounting, Finance, and Economics Formulas

If you’re looking for a step-by-step shortcut to learn case interviews quickly, enroll in our case interview course . These insider strategies from a former Bain interviewer helped 30,000+ land consulting offers while saving hundreds of hours of prep time.

Profit Formulas for Case Interviews

1. Revenue = Quantity * Price

Revenue is the amount of money a company brings in from selling its products. This can be calculated by taking the number of units sold and multiplying it by the price per unit.

Example: Your company sells shirts for $20 each. Last year, your company sold 1,000 shirts. So, your total revenue last year was 1,000 * $20 = $20,000.

2. Total Variable Costs = Quantity * Variable Costs

Costs are payments that a company needs to make in order to run and operate its business. There are two different types of costs, variable costs and fixed costs.

Variable costs are costs that directly increase for each additional unit of product made. It represents the cost of raw materials needed to make the product.

Total variable costs are calculated by taking the number of units produced or sold and multiplying it by the raw material cost per product.

Example: It costs your company $5 to purchase the raw materials needed to make a shirt. If your company sold 1,000 shirts last year, the total variable costs are 1,000 * $5 = $5,000.

3. Costs = Total Variable Costs + Fixed Costs

Total costs for the company can be calculated by adding total variable costs and fixed costs.

Fixed costs are costs that do not directly increase for each additional unit of product made. They may include costs such as rent for the building or equipment needed to make the product.

Example: Your company pays annual rent of $10,000. It also leases the equipment it needs to make its shirts for $2,000 a year. Therefore, fixed costs are $10,000 + $2,000 = $12,000. Total variable costs were calculated to be $5,000 from the previous example. So, total costs are $12,000 + $5,000 = $17,000.

4. Profit = Revenue – Costs

Profit is the amount of money the company keeps after paying for all of its costs. Profit is calculated by subtracting total costs from total revenue.

Example: Last year, your shirt company generated revenues of $20,000 and had costs of $17,000. The profit last year was $20,000 - $17,000 = $3,000.

5. Profit = (Price – Variable Costs) * Quantity – Fixed Costs

This formula summarizes the previous four formulas into one concise and simplified equation.

6. Contribution Margin = Price – Variable Cost

Contribution margin represents how much money each product sold brings into the company after accounting for the cost of raw materials needed to make the product.

Example: If your company’s shirts sell for $20 and raw materials cost $5, then the contribution margin is $20 - $5 = $15 per shirt.

7. Profit Margin = Profit / Revenue

Profit margin represents the percentage of revenue that a company keeps as profit after taking into account all of its costs.

Example: Last year, your company generated $20,000 in revenue and had $17,000 in costs. Its profit was $3,000. Therefore, your company’s profit margin is $3,000 / $20,000 = 15%.

Investment Formulas for Case Interviews

8. Return on Investment = Profit / Investment Cost

Companies make investments by spending money in the hopes of earning even more money in the future as a result of the investment. Return on investment, or ROI or short, represents how much additional money a company generates relative to the size of its initial investment.

ROI is calculated by taking the profit that the company generated from the investment and dividing it by the investment cost.

Example: Your company spent $5,000 on marketing to advertise its shirts. As a result, the company generated an additional $6,000 in profits from selling shirts. This profit does not yet take into account the costs of the marketing campaign.  Therefore, the company has a net increase in profits of $1,000 from its original $5,000 investment. The ROI is $1,000 / $5,000 = 20%.

9. Payback Period = Investment Cost / Profit per Year

Payback period represents how long it would take a company to recoup the money it spent on an investment. It is usually specified in years.

Example: Your company invested in redesigning its shirts for $5,000. As a result, the company expects annual profits to increase by $1,000 for every year going forward. Therefore, the payback period for this investment is $5,000 / $1,000 = 5 years.

Operations Formulas for Case Interviews

10. Output = Rate * Time

The output of production can be calculated by taking the rate of production and multiplying it by time.

Example: The machine that your company uses to produce shirts can produce 5 shirts per hour. If the machine runs for 12 hours, then it will produce 60 shirts.

11. Utilization = Output / Maximum Output

Utilization represents how much a factory or machine is being used relative to its maximum possible output.

Example: The machine that your company uses to produce shirts can produce 5 shirts per hour. Therefore, its maximum capacity in a day is 5 shirts per hour * 24 hours = 120 shirts. If your machine is being used to only produce 60 shirts per day, then it is at 60 / 120 = 50% utilization.

Market Share Formulas for Case Interviews

12. Market Share = Company Revenue in the Market / Total Market Revenue

Market share measures the percentage of total market sales a particular company has. Market shares can range from 0%, no presence in the market, to 100%, complete dominance in the market.

Example: Your company sells shirts and generates $100M in annual revenues. The market size of shirts is $500M. Therefore, your company has a market share of $100M / $500M = 20%. 

13. Relative Market Share = Company Market Share / Largest Competitor’s Market Share

Relative market share compares a company’s market share to the largest competitor’s market share. It measures how strong of a presence a company has relative to the market leader. If the company is the market leader, relative market share measures how much of a lead they have over the next largest player.

Instead of using company market share and the largest competitor’s market share, you can use company revenue and the largest competitor’s revenue. This will give you the same answer.

Example: Your company has a 20% market share in the shirts market. Your largest competitor has a 50% market share. Therefore, your relative market share is 20% / 50% = 0.4.

Example 2: Your company is the market leader and has a 50% market share in the shirts market. Your largest competitor has a 25% market share. Therefore, your relative market share is 50% / 25% = 2.

Accounting, Finance, and Economics Formulas for Case Interviews

These formulas are much less commonly seen in case interviews than the previous formulas. You likely won’t need to use these formulas since they require more technical knowledge of accounting, finance, and economics.

However, you should still be familiar with these formulas in the small chance that one of these concepts shows up in your case interview.

14. Gross Profit = Sales – Cost of Goods Sold

Gross profit is a measure of how much money a company makes from selling its product after taking into account the costs associated with making and sellings its product. These costs are often called the cost of goods sold.

Compared to the previous profit formula, which was simply revenue minus costs, gross profit is always higher since it does not take into account all of the costs of the business.

Example: Your company sold $20,000 of shirts last year. The cost to produce these shirts was $5,000. Therefore, your gross profit is $20,000 - $5,000 = $15,000.

15. Operating Profit = Gross Profit – Operating Expenses – Depreciation – Amortization

Operating profit is calculated by taking gross profit and subtracting all operating expenses and depreciation and amortization.

Operating expenses may include rent, utilities, maintenance and repairs, advertising and marketing, insurance, and salaries and wages. So, operating profit is always less than gross profit.

Depreciation is the spreading of a fixed asset’s cost over its useful lifetime.

For example, let’s say that a company purchases a new machine for $10,000 that it expects to last for 5 years. Instead of stating that it incurred $10,000 in costs in its first year, the company may choose to state that the new machine costs $2,000 per year for the next five years.

Amortization is the spreading of an intangible asset’s cost over its useful lifetime. It is the exact same principle as depreciation except that it deals with intangible assets, or assets that aren’t physical.

For example, let’s say that a company purchases a patent for $10,000 and expects the benefits of the patent to last for 20 years. Instead of stating that it incurred $10,000 in costs in its first year, the company may choose to state that the patent costs $500 per year for the next twenty years.

Example: You sold $20,000 of shirts last year. Cost of goods is $5,000, operating expenses are $10,000, depreciation of a machine is $2,000, and amortization of a patent is $500. Therefore, your operating profit is $20,000 - $5,000 - $10,000 - $2,000 - $500 = $2,500.

16. Gross Profit Margin = Gross Profit / Revenue

This is the exact same formula as the profit margin formula except that gross profit is used. Gross profit margin measures how much money a company keeps from selling its products after taking into account cost of goods sold.

Example: Your company has a gross profit of $15,000 from $20,000 of revenue. Therefore, your gross profit margin is $15,000 / $20,000 = 75%.

17. Operating Profit Margin = Operating Profit / Revenue

This is the exact same formula as the profit margin formula except that operating profit is used. Operating profit margin measures how much money a company keeps from sellings its products after cost of goods sold, operating expenses, depreciation, and amortization is taken into account.

Example: Your company has an operating profit of $2,500 from $20,000 of revenue. Therefore, your operating profit margin is $2,500 / $20,000 = 12.5%.

18. EBITDA = Operating Profit + Depreciation + Amortization

EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It is a financial metric used to measure a company’s cash flow or the amount of cash that a company has generated in a period of time.

To calculate EBITDA, start with operating profit and add back depreciation and amortization expenses.

Example: Your company has an annual operating profit of $2,500. Depreciation expenses are $2,000 and amortization expenses are $500. Therefore, your EBITDA is $2,500 + $2,000 + $500 = $5,000.

19. CAGR = (Ending Value / Beginning Value)^(1/Time Period) – 1

CAGR stands for compounded annual growth rate. It measures how quickly something is growing year after year.

Example: Your company generates $144M in annual revenue. Two years ago, your company only generated $100M. Over this time period, your CAGR was ($144M / $100M)^(1/2) - 1= 20%. In other words, your company grew by 20% each year for two years.

20. Rule of 72

The Rule of 72 is a shortcut used to estimate how long a market, company, or investment would take to double in size. To use it, simply divide 72 by the annual growth rate to get an estimate for the number of years needed to double in size.

Example: Your company is growing steadily at 9% per year. Using the Rule of 72, we’d expect it to take 72 / 9 = 8 years for your company to double in size if it maintains its current growth rate.

21. NPV = Cash Flow / [(1 + Discount Rate)^(Time Period)]

NPV stands for net present value. It measures how much future cash flow is worth today.

Receiving $1,000 right now is not the same as receiving $1,000 five years from now. If you received $1,000 right now, you could invest it and grow your money. Therefore, it is better to receive $1,000 right now than to receive the same amount in the future.

Net present value takes this into account.

Cash flow is the amount of money you expect to receive in the future. Time period is how many years in the future you will receive that amount of money. The discount rate is the return you expect to get from investing your money.

Example: You expect to receive $1,000 five years from now. You expect that you will be able to get 8% annual returns by investing in the stock market. Therefore, the net present value of your future cash flow is $1,000 / [(1 + 0.08)^5] = $680.58.  In other words, receiving $680.58 today would give you the same value as receiving $1,000 five years from now.

22. Perpetuity Formula: Present Value = Cash Flow / Discount Rate

An annuity is a fixed sum of money paid at regular intervals such as every year. Perpetuity is an annuity that lasts forever.

The present value of a perpetuity is calculated by taking the cash flow of each payment and dividing it by the discount rate.

Example: You are expecting to receive $1,000 per year for the rest of your life. You expect that you will be able to get 8% annual returns by investing in the stock market. Therefore, the present value of this perpetuity is $1,000 / 0.08 = $12,500.  In other words, receiving $12,500 today would give you the same value as receiving $1,000 each year for the rest of your life.

23. Return on Equity = Profit / Shareholder Equity

Return on equity , or ROE for shirt, measures how effectively a company is using its assets to create profits. It is calculated by taking profit and dividing by shareholder equity, which represents the net worth of a company.

In other words, shareholder equity is the value of a company’s total assets minus its total liabilities.

Example: Your company’s profit this year is $100M. Shareholder equity, or the net worth of the company is $1B. Your company has a ROE of $100M / $1B = 10%.

24. Return on Assets = Profit / Total Assets

Return on assets , or ROA for short, measures how profitable a company is relative to its total assets. In other words, it shows how efficiently a company is using its assets to generate income.

Assets can be anything that has value that can be converted into cash. This includes cash, property, equipment, inventory, and investments.

Example: Your company’s profit this year is $100M. Your company as $400M worth of assets. Your company has a ROA of $100M / $400M = 25%.

25. Price Elasticity of Demand = (% Change in Quantity) / (% Change in Price)

Elasticity is a measure of how much customer demand changes for a product given a change in the product’s price. In almost all cases, an increase in a product’s price results in a decrease in customer demand. Therefore, price elasticity of demand is usually negative.

Example: Your company has decreased its product’s price by 10%. As a result, the number of units sold has increased by 20%. Therefore, the price elasticity of demand is 20% / -10% = -2.

26. Cross Elasticity of Demand = (% Change in Quantity for Good #1) / (% Change in Price for Good #2)

Cross elasticity of demand measures how much customer demand changes for a product given a change in price of a different product.

If two products are complements, an increase in price of one product will result in a decrease in demand of the other product. Complementary products have a negative cross elasticity of demand.

If two products are substitutes, an increase in price of one product will result in an increase in demand of the other product. Substitute products have a positive cross elasticity of demand.

Example: A competitor has decreased the price of a competing product by 20%. As a result, the demand for your product has dropped by 10%. The cross elasticity of demand is -10% / -20% = 0.5.

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How to prepare for the case study in a private equity interview

If you're  interviewing for a job in a private equity firm , then you will almost certainly come across a case study. Be warned: recruiters say this is the hardest part of the private equity interview process and how you handle it will decide whether you land the job.

“The case study is the most decisive part of the interview process because it’s the closest you get to doing the job,"  says Gail McManus of Private Equity Recruitment. It's purpose is to make you answer one question: 'Would you invest in this company?'

In most cases, you'll be given a  'Confidential Information Memorandum'  (CIM) relating to a company the private equity fund could invest in. You'll be expected to a) value the company, and b) put together an investment proposal - or not. Often, you'll be allowed to take the CIM away to prepare your proposal at home.

 “The case study is still the most decisive element of the recruitment process because it’s the closest you get to actually doing the job.  Candidates can win or lose based on how they perform on case study. People who are OK in the interview can land the job by showing the quality of their thinking, ” says McManus. “You need to show that you can think, and think like an investor.”

"The end decision [on whether to invest] is not important," says one private equity professional who's been through the process. "The important thing is to show your thinking/logic behind answer."

Preparing for a PE case study has distinctive challenges for consultants and bankers. If you're a consultant, you need to, "make a big effort to mix your strategic toolkit with financial analysis. You need to prove that you can go from a strategic conclusion to a finance conclusion," says one PE professional. Make sure you're totally familiar with the way an  LBO model  works.

If you're a banker, you need to, "make a big effort to develop your strategic thinking," says the same PE associate. The fund you're interviewing with will want to see that you can think like an investor, not just a financier. "Reaching financial conclusions is not enough. You need to argue why certain industry is good, and why you have a competitive advantage or not. Things can look good on paper, but things can change from a day to another. As a PE investor, hence as a case solver, you need to highlight and discuss risks, and whether you are ready or not to underwrite them."

Kadeem Houson, partner at KEA consultants, which specialises in hiring junior to mid-level PE professionals, says: “If you’re a banker you’re expected to have great technical skills so you need to demonstrate you can think commercially about the numbers you plugged in.    Conversely, a consultant who is good at blue sky thinking might be pressed more on their understanding of the model. Neither is better or worse – just be conscious of your blank spots.”

A good business versus a good investment

For McManus, one of the most important things to consider when looking at the case study is to understand the difference between a good business and a good investment. The difference between a good business and a good investment is the price. So you might have a great business but if you have to pay hugely for it it might not be a great business. Conversely you can have a so-so business but if you get it a good price it might make a great investment. “

McManus says as well as understanding the difference between a good business and a good investment, it’s important to focus on where the added value lies.  This has become a critical element for private equity firms to consider  as competition for assets has become even more fierce, given the amount of dry powder that funds now have at their disposal through a wide array of funds.   “Because of the competition for transactions generally you have to overpay to win a deal. So in the case study it’s really important you think about where the value creation opportunity lies in this business and what the exit would be,” says McManus.

She advises candidates to be brave and state a specific price, provided you can demonstrate how you’ve arrived at your answer.

Another private equity professional says you shouldn't go out on a limb, though, and you should appear cautious: "Keep all assumptions conservative at all times so as not to raise difficult questions. Always highlight risks, downsides as well as upsides."

Research the fund – find the angle

One private equity professional says that understanding why an investment might suit a particular firm could prove to be a plus. Prior to the case study, check whether the fund favours a particular industry sector, so that when it comes to the case study, you can add that to the investment thesis. “This enables you to showcase you have read up on the firm’s strategy/unique characteristics Something that would make it more likely for the fund you’re interviewing with winning the deal in what’s a very competitive market, said the PE source, who said this knowledge made him stand out.

However, the  primary purpose of the case study  is to test  the quality of your  thinking - it is not to  test you on your knowledge of the fund. “Knowing about the fund will tick an extra box, but the case study is about focusing on the three most critical things that will drive the investment decision,” says McManus. 

You need to think through these questions and issues:

We spoke to another private equity professional who's helpfully prepared a checklist of points to think about when you're faced with the case study. "It's a cheat sheet for some of my friends," he says.

When you're faced with a case study, he says you need to think in terms of: the industry, the company, the revenues, the costs, the competition, growth prospects, due dliligence, and the transaction itself.

The questions from his checklist are below. There's some overlap, but they're about as thorough as you can get.

When you're considering the  industry, you need to think about:

- What the company does. What are its key products and markets? What's the main source of demand for its products?

- What are the key drivers in that industry?

- Who are the market participants? How intense is the competition?

- Is the industry cyclical? Where are we in the cycle?

- Which outside factors might influence the industry (eg. government, climate, terrorism)?

When you're considering the company, you need to think about:  

- Its position in the industry

- Its growth profile

- Its operational leverage (cost structure)

- Its margins (are they sustainable/improvable)?

- Its fixed costs from capex and R&D

- Its working capital requirements

- Its management

- The minimum amount of cash needed to run the business

When you're considering the revenues, you need to think about:

- What's driving them

- Where the growth is coming from

- How diverse the revenues are

- How stable the revenues are (are they cyclical?)

- How much of the revenues are coming from associates and joint ventures

- What's the working capital requirement? - How long before revenues are booked and received?

When you're considering the costs, you need to think about:

- The diversity of suppliers

- The operational gearing (What's the fixed cost vs. the variable cost?)

- The exposure to commodity prices

- The capex/R&D requirements

- The pension funding

- The labour force (is it unionized?)

- The ability of the company to pass on price increases to customers

- The selling, general and administrative expenses (SG&A). - Can they be reduced?

When you're considering the competition, you need to think about:

- Industry concentration

- Buyer power

- Supplier power

- Brand power

- Economies of scale/network economies/minimum efficient scale

- Substitutes

- Input access

When you're considering the growth prospects, you need to think about:

- Scalability

- Change of asset usage (Leasehold vs. freehold, could manufacturing take place in China?)

- Disposals

- How to achieve efficiencies

- Limitations of current management

When you're considering the due diligence, you need to think about: 

- Change of control clauses

- Environmental and legal liabilities

- The power of pension schemes and unions

- The effectiveness of IT and operations systems

When you're considering the transaction, you need to think about:

- Your LBO model

- The basis for your valuation (have you used a Sum of The Parts (SOTP) valuation or another method - why?)

- The company's ability to raise debt

- The exit opportunities from the investment

- The synergies with other companies in the PE fund's portfolio

- The best timing for the transaction

BUT: keep things simple.

While this checklist is important as an input and a way to approach the task, w hen it comes to presenting the information, quality beats quantity.  McManus says: “The main reason why people aren’t successful in case studies is that they say too much.  What you’ve got to focus on is what’s critical, what makes a difference. It’s not about quantity, it’s about quality of thinking. If you do 30 strengths and weaknesses it might only be three that matter. It’s not the analysis that matters, but what’s important from that analysis. What’s critical to the investment thesis. Most firms tend to use the same case study so they can start to see what a good answer looks like.”

Houson agrees that picking out the most important elements in the case study are more important than spending too much time on an elaborate model.   “You don’t necessarily need to demonstrate such technical prowess when it comes to building the model. But you need to be comfortable about being challenged around the business case. Frankly it’s better to go for a simple answer which sparks a really interesting conversation rather than something that is purely judged from a technical standpoint.  The model is meant to inform the discussion, not be the discussion itself.”

Softer factors such as interpersonal skills are also important because if the case study is the closest thing you’ll get to doing the job, then it’s also a measure of how you might behave in a live situation.  McManus says: “This is what it will be like having a conversation at 11am  with your boss having been given the information memorandum the day before.  Not only are the interviewers looking at how you approach the case study, but they’re also looking at whether they want to have this conversation with you every Tuesday morning at 11am.”

The exercise usually takes around four hours if you include the modelling aspect, so there is time pressure. “Top tips are to practice how to think in a way that is simple, but fit for purpose. Think about how to work quickly. The ability to work under pressure is still important,” says Houson.

But some firms will allow you do complete the CIM over the weekend. In that case on one private equity professional says you should get someone who already works in PE to check it over for you. He also advises getting friends who've been through case study interviews before to put you through some mock questions on your presentation.

But McManus says this can lead to spending too much time and favours the shorter method. “It’s fairer and you can illustrate the quality of your thinking over a short space of time.”

The case study is conducted online, and because of Covid, so too are many of the follow-up discussions, so it’s worth thinking about how to present yourself on zoom or Teams. “Although a lot of these case studies over the last couple of years have been done remotely, in many ways that’s even more reason to try to bring out a bit of engagement and personality with the people you’re talking to." 

“ There’s never a right or wrong answer. Rather it’s showing your thinking and they like to have that discussion with you. It’s the nearest you get to doing the job. And that cuts both ways – if you don’t like the case study, you won't like doing the job. “

Contact:  [email protected]  in the first instance. Whatsapp/Signal/Telegram also available (Telegram: @SarahButcher)

Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.

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35 Case Interviews Examples from MBB / Big Four Firms

Studying case interview examples is one of the first steps in preparing for the  management consulting  recruitment process. If you don’t want to spend hours searching the web, this article presents a comprehensive and convenient list for you – with 35 example cases, 16 case books, along with a case video accompanied by detailed feedback on tips and techniques.

A clear understanding of “what is a case interview” is essential for effective use of these examples. I suggest reading our  Case Interview 101  guide, if you haven’t done so.

McKinsey case interview examples

Mckinsey practice cases.

• Diconsa Case
• Electro-Light Case
• GlobaPharm Case
• National Education Case

What should I know about McKinsey Case interviews?

At McKinsey, case interviews often follow the interviewer-led format , where the interviewer asks you multiple questions for you to answer with short pitches.

How do you nail these cases? Since the questions can be grouped into predictable types, an efficient approach is to master each question type. However, do that after you’ve mastered the case interview fundamentals!

For a detailed guide on interviewer-led cases, check out our article on McKinsey Case Interview .

BCG & Bain case interview examples

Bcg practice cases.

• BCG – Written Case – Chateau Boomerang

Bain practice cases

• Bain – Coffee Shop Co.
• Bain – Fashion Co.
• Bain – Mock Interview – Associate Consultant
• Bain – Mock Interview – Consultant

What should I know about BCG & Bain case interviews?

Unlike McKinsey, BCG and Bain case interviews typically follow the candidate-led format – which is the opposite of interviewer-led, with the candidate driving the case progress by actively breaking down problems in their own way.

The key to acing candidate-led cases is to master the case interview fundamental concepts as well as the frameworks.

Some BCG and Bain offices also utilize written case interviews – you have to go through a pile of data slides, select the most relevant ones to answer a set of interviewer questions, then deliver those answers in a presentation.

For a detailed guide on candidate-led cases, check out our article on BCG & Bain Case Interview .

Deloitte case interview examples

Deloitte practice cases.

Undergrad Cases

• Human Capital – Technology Institute
• Human Capital – Agency V
• Strategy – Federal Benefits Provider
• Strategy – Extreme Athletes
• Technology – Green Apron
• Technology – Big Bucks Bank
• Technology – Top Engine
• Technology – Finance Agency

Advanced Cases

• Human Capital – Civil Cargo Bureau
• Human Capital – Capital Airlines
• Strategy – Club Co
• Strategy – Health Agency
• Technology – Waste Management
• Technology – Bank of Zurich
• Technology – Galaxy Fitness

What should I know about Deloitte case interviews?

Case interviews at Deloitte also lean towards the candidate-led format like BCG and Bain.

The Deloitte consultant recruitment process also features group case interviews , which not only test analytical skills but also place a great deal on interpersonal handling.

Accenture case interview examples

Accenture divides its cases into three types with very cool-sounding names.

Sorted in descending order of popularity, they are:

These are similar to candidate-led cases at Bain and BCG. albeit shorter – the key is to develop a suitable framework and ask the right questions to extract data from the interviewer.

These are similar to the market-sizing and guesstimate questions asked in interviewer-led cases – demonstrate your calculations in structured, clear-cut, logical steps and you’ll nail the case.

These cases have you sort through a deluge of data to draw solutions; however, this type of case is rare.

Capital One case interview examples

Capital One is the odd one on this list – it is a bank-holding company. Nonetheless, this being one of the biggest banks in America, it’s interesting to see how its cases differ from the consulting ones.

Having gone through Capital One’s guide to its cases, I can’t help but notice the less-MECE structure of the sample answers. Additionally, there seems to be a greater focus on the numbers.

Nonetheless, having a solid knowledge of the basics of case interviews will not hurt you – if anything, your presentation will be much more in-depth, comprehensive, and understandable!

See Capital One Business Analyst Case Interview for an example case and answers.

Other firms case interview examples

Besides the leading ones, we have some examples from other major consulting firms as well.

• Oliver Wyman – Wumbleworld
• Oliver Wyman – Aqualine
• LEK – Cinema
• LEK – Market Sizing
• Kearney – Promotional Planning
• OC&C – Imported Spirits
• OC&C – Leisure Clubs

Consulting clubs case books

In addition to official cases, here are a few case books you can use as learning materials.

Do keep in mind: don’t base your study on frameworks and individual case types, but master the fundamentals so you can tackle any kind of case.

• Wharton Consulting Club Case Book
• Tuck Consulting Club Case Book
• MIT Sloan Consulting Club Case Book
• LBS Consulting Club Case Book
• Kellogg Consulting Club Case Book
• INSEAD Consulting Club Case Book
• Harvard Consulting Club Case Book
• ESADE Consulting Club Case Book
• Darden Consulting Club Case Book
• Berkeley Consulting Club Case Book
• Notre-Dame Consulting Club Case Book
• Illinois Consulting Club Case Book
• Columbia Consulting Club Case Book
• Duke Consulting Club Case Book
• Ross Consulting Club Case Book
• Kearney Case Book

Case interview example – Case video

The limitation of most official case interview examples is that they are either too short and vague, or in text format, or both.

To solve that problem for you, we’ve extracted a 30-minute-long, feedback-rich case sample from our Case Interview End-to-End Secrets Program .

This is a candidate-led, profitability case on an internet music broadcasting company called Pandora.

In 30 minutes, this candidate demonstrates the exact kind of shortcoming that most candidates suffer during real case interviews – they come in with sharp business senses, then hurt their own chances with inadequate techniques.

Here are seven notable areas where the candidate (and you) can improve:

Thanking Throughout the case, as especially in the opening, he should have shown more appreciation for the time the interviewer spent with him.

Structured opening The candidate’s opening of the case feels unstructured. He could have improved it by not mixing the playback and clarification parts. You can learn to nail the case in a 3-minute start through this video on How to Open Any Case Perfectly .

Explicitness A lot of the candidate’s thought process remains in his head; in a case interview, it’s better to be as explicit as possible – draw your issue tree out and point to it as you speak; state your hypothesis when you move into a branch; when you receive data, acknowledge it out loud.

Avoiding silence The silence in his case performance is too long, including his timeout and various gaps in his speech; either ask for timeout (and keep it as short as possible) or think out loud to fill those gaps.

Proactivity The candidate relies too much on the interviewer (e.g: asking for data when it can easily be calculated); you don’t want to appear lazy before your interviewer, so avoid this.

Avoiding repeating mistakes Making one mistake twice is a big no-no in consulting interviews; one key part of the consulting skill set is the ability to learn, and repeating your mistakes (especially if the interviewer has pointed it out) makes you look like someone who doesn’t learn.

Note-taking Given the mistakes this candidate makes, he’s probably not taking his notes well. I can show you how to get it right if you watch this video on Case Interview Note-Taking .

Nonetheless, there are three good points you can learn from the candidate:

The candidate sums up what he’s covered and announces his upcoming approach at the start and at key points in the case – this is a very good habit that gives you a sense of direction and shows that you’re an organized person.

The candidate performs a “reality check” on whether his actions match the issue tree; in a case interview it’s easy to lose track of what you’re doing, so remember to do this every once in a while.

The candidate prompts the interviewer to give out more data than he asked for; if anything, this actually matches a habit of real consultants, and if you’re lucky, your interviewer may actually give out important pieces you haven’t thought of.

These are only part of the “ninja tips” taught In our Case Interview E2E Secrets Program – besides the math and business intuition for long-term development, a key feature is the instant-result tips and techniques for case interviews.

Once you’ve mastered them, you can nail any case they throw at you!

For more “quality” practice, let’s have a mock case interview with former consultants from McKinsey, BCG, Bain, Oliver Wyman, Strategy& and many other consulting firms. They will help you identify your problem areas and give you actionable feedback, making your preparation much easier and faster.

Hi! This is Kim and welcome to another performance in the Tips & Techniques part of our amazing End-to-end program. You are about to hear a really interesting performance.

There is a common Myth that Profitability cases are easier. Well, for beginners, that’s may make sense, but I would argue that Profitability cases can be really tricky and candidates without good foundation will make about the same level of mistakes regardless of type of cases given.

The profitability case we are about to watch will show that. It’s a very unconventional

Profitability. It started out like a typical one but getting more and more tricky toward the end.

The candidate is fairly good in term of business intuition, but the Tips & Techniques aspect needs a lot of fine tune! Now let’s go ahead and get started! 

It’s actually a little better to playback the case information and ask clarifications. The candidate does not distinguish between the two and do both at a same time. Also, the candidate was asking these clarifications in an unorganized and unstructured fashion. This is not something terrible, but could have been better, especially when this is the very first part of the case, where the crucial first impression is being formed.

My pitch would sound like this:

“That’s a very interesting problem and I am happy to get the chance to solve it. First of all let me tell you my understanding of the case context and key objectives. Then I would like to ask a few clarifying questions regarding a few terminology and concepts. Both of these are to make sure that I will be solving the right problem.

So here is my understanding of the case: The client is ABC. Here are some DEF facts about the situation we just talked about. And the key case question is XYZ.

Does that correctly and adequately summarize the case?”

Once the interviewer confirms, I would move to the clarification part as follows: “Now I would like to ask a few clarification questions. There are three of them: No 1, … No 2, … and No 3, …”

You may see above pitch as obvious but that’s a perfect example of how you should open any cases. Every details matters. We will point out those details in just a second. But before we do that, it’s actually very helpful if you can go back, listen carefully to the above pitch, and try to point out the great components yourselves. Only after that, go back to this point and learn it all together.

Alright, let’s break down the perfect opening.

First of all, you hear me say: “That’s a very interesting problem and I am happy to get a chance to solve it”. This seems trivial but very beneficial in multiple ways:

1. I bought myself a couple of seconds to calm down and get focused. 2. By nature, we as human unconsciously like those who give us compliments. Nothing better than opening the case with a modest compliment to the interviewer.

And (c) I showed my great attitude towards the case, which the interviewer would assume is the same for real future consulting business problems.

You should do that in your interviews too. Say it and accompany it with the best smile you can give. It shows that you are not afraid of any problems. In fact, you love them and you are always ready for them.

Secondly, I did what I refer to as the “map habit”, which is to always say what you are about to do and then do it. Just like somebody in the car showing the drivers the route before cruising on the road. The driver would love it. This is where I said: “Let me tell you my understanding of the case context and key objectives. Then ABC…”.

Third, right at the beginning of the case, I try to be crystal clear and easy to follow. I don’t let the interviewer confused between playing the case vs. asking clarification questions. I distinguish between the two really carefully. This habit probably doesn’t change the outcome of how the case goes that much, but it certainly significantly changes the impression the interviewer has of me.

Fourth, in playing back the case, each person would have a different way to re-phrase. But there are three buckets to always include:

1. Who is the client 2. The facts regarding the client and the situation and (c) The key question and the objective of the case.

Fifth, after playing the case context and objectives, I pause for a second and ALIGN with the interviewer: “Does it correctly and adequately summarize the case?”. This is a habit that every consulting manager loves for young consultants to do. Nobody wants first-year folks to spend weeks of passion and hard-work building an excel model that the team can’t use. This habit is extensively taught at McKinsey, Bain and BCG, so therefore interviewers would love somebody that exhibits this habit often in case interview.

Lastly, when asking clarification questions, you hear me number them very carefully to create the strong impression that I am very organized and structured. I said I have three clarifying questions. Then I number them as I go through each. No.1, No.2, and No.3.

Sometimes, during interviews it’s hard to know exactly how many items you are going to get. One way is to take timeout often to carefully plan your pitch. If this is not possible in certain situations, you may skip telling how many items you have; but you should definitely still number your question: No.1, No.2; and so on. 

Just a moment ago, the candidate actually exhibited a good habit. After going through his clarification questions, the candidate ended by asking the “is there anything else” question. In this case, I actually give out an important piece of data.

Though this is not very common as not every interviewer is that generous in giving out data. But this is a habit management consultants have to have every day when talking to experts, clients, or key stakeholders. The key is to get the most data and insights out of every interview and this is the type of open-ended question every consultant asks several times a day.

To show of this habit in a case interview is very good!

There are three things I would like you to pay attention to:

First, it took the candidate up to 72 seconds to “gather his thoughts”. This is a little too long in a case interview. I intentionally leave the 72 seconds of silence in the recording so you get an idea of how long that is in real situations. But it’s worth-noting here is not only that. While in some very complicated and weird cases, it’s ok to take that long to really think and gather ideas. In this case, the approach as proposed by the candidate is very simple. For this very approach, I think no more than 15 to 20 seconds should be used.

No.2, with that said, I have told I really like the fact that this candidate exhibits the “map” habit. Before going straight to the approach he draws the overall approach first.

No.3. You also see here that the candidate tried to align the approach with me by asking my thoughts on it. As I just said on the previous comment, this is a great habit to have. Not only does it help reduce chance of going into the wrong direction in case interviews, but it also creates a good impression. Consulting interviewers love people doing it often!

Here we see a not-really-bad response that for sure could be much better. The candidate was going into the first branch of the analysis which is Revenue. I would fix this in 3 aspects:

First, even though we just talked about the overall approach, it’s still better to briefly set up the issue tree first then clearly note that you are going into one branch.

Second, this is not a must, but I always try to make my hypothesis as explicitly clear as possible. Here the candidate just implicitly made a hypothesis that the problem is on the revenue side. The best way to show our hypothesis-driven mindset is to explicitly say it.

Third, you hear this a ton of times in our End-to-End program but I am going to repeat it again and again. It is better to show the habit of aligning here too. Don’t just go into revenue, before doing that, give the interviewer a chance to agree or to actually guide you to Cost.

So, summarizing the above insights, my pitch would sound something like this:

“So as we just discussed, a profit problem is either caused by revenue or by cost. Unless you would like to go into cost first, let’s hypothesize that the problem is on revenue side. I would like to look deeper into Revenue. Do we have any data on the revenue?”

And while saying this, you should literally draw an issue tree and point to each as you speak.

There is an interesting case interview tip I want to point out here. Notice how the candidate responds after receiving two data points from me. He went straight into the next question without at least acknowledging the data received and also without briefly analyzing it.

I am glad that the candidate makes this mistakes… well, not glad for him but for the greater audience of this program. I would like to introduce to you the perfect habit of what you should react and do every time you have any piece of data during case interviews. So three things you need to do:

Step 1: Say … that’s an interesting piece of data. This helps the interviewer acknowledge that you have received and understand the data. This also buys you a little time. And furthermore, it’s always a good thing to give out modest compliments to the interviewer.

Step 2: Describe the data, how it looks, is there any special noteworthy trend? In this case, we should point out that revenue actually grew by more than 50%.

Also notice here that I immediately quantified the difference in specific quantitative measurement (in this case, percentage). Saying revenue went up is good, but it’s great to be able to say revenue went up by more than 50%.

Step 3: Link the trend identified back to the original case question and the hypothesis you have. Does it prove, disprove, or open up new investigation to really test the hypothesis? In this case, this data piece actually opened up new investigating areas to test the hypothesis that the bottleneck is within revenue.

My sample pitch for this step 3 would sound like this: “It’s interesting that revenue went up quite a bit. However, to be able to fully reject our hypothesis on the revenue, I would like to compare our revenue to that of the competitors as well.”

Then only at this point, after going through 3 steps above, I ask for the competitors’ revenue like the candidate did.

Notice here that I ended up asking the same question the candidate did. This shows that the candidate does have a good intuition and thought process. It’s just that he did all of these implicitly on his head.

In consulting case interview, it’s always good to do everything as explicitly as possible. Not only is it easier to follow but it helps show your great thought process.

… the rest of the transcript is available in our End To End Case Interview

Learn the Secrets to Case Interview!

Join countless other successful candidates around the world with our Case Interview End-to-End Secrets Program ! 10 example cases with 100+ real-time feedbacks on tips and techniques, 50+ exercises on business intuition and 1300+ questions for math practice!

Scoring in the McKinsey PSG/Digital Assessment

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Elevate your case interview skills with a well-rounded preparation package

Preparing for case interviews is a hard task when you only have 1 week, so the first part you need to learn during this time is fundamentals of case interview

Case interview in consulting is difficult with the passing rate is around 10%. This is because big consulting firms keep an extremely high recruitment standard

A case interview is where candidates is asked to solve a business problem. They are used by consulting firms to evaluate problem-solving skill & soft skills

The Tesla Financial Analyst Interview Guide

Walk through the Tesla financial analyst interview process and learn how I landed a job with Tesla’s FP&A Business Operations team.

Introduction

In this article, Michael (former FP&A and Business Operations Analyst at Tesla), will walk you through the steps he took to land a full-time analyst role at Tesla. This guide will cover the various stages of the interview process alongside general notes, tips, and sample interview questions and answers.

#1 Passing the Resume Screen

Tesla received 3 million job applications in all of 2021. This may sound a bit daunting, but there are several different things that you can do to squeeze past this first obstacle.

Clean Up Your Resume

First, you need to clean up your resume and tailor all of your experiences to best fit the financial analyst role or whichever role you are applying for.

Tesla is an innovative, technology-driven company that likes seeing people use data to make logical business decisions. Keep this in mind when tuning up the bullets in your resume.

When writing the experience section of your resume, you should make sure to start each bullet with an action verb. This will help cut down the excess “fluff” in your resume and make it easier for recruiters to understand your previous tasks and experiences.

Sample Action Verbs:

• More Action Verbs

In addition to using action verbs, you should quantify your resume as much as possible so that you clearly state how you added value to your previous companies. For example, you can change “Reduced product line wait time” to “Reduced product line wait time by 3 seconds resulting in a 15% increase in production efficiency.”

For more details and tips, check out our other article on how to write the perfect resume .

Try to Obtain an Employee Referral

With thousands of applications flowing into Tesla each day, an employee referral would certainly help bring your resume to the top of the stack.

Now if you don’t have any existing friends or connections that work at Tesla, you can try to use LinkedIn and cold emails to contact an existing employee to ask for a quick phone call.

When scrolling through your LinkedIn network, try to look for your school alumni and ideally people who work on the finance team or the team that you are applying to. The goal is to hop on a phone call with your connection so that you can learn more about the working roles at Tesla and demonstrate a genuine interest in the company.

For those looking to better their chances of a referral, we recommend you check out our article on Networking Cold Email Templates.

#2 Phone Screen

If you make it past the resume screen, then congratulations, you’ve made it past the largest cutting stage of the application process.

Following the resume screen, you’ll likely have to hop on a call with one recruiter and one or two finance managers. These calls are quite straightforward and very behavioral-focused. Although they seem quite simple, it will be important to give off a good impression and to make your interviewers believe that you will be a good fit on one of their teams.

Preparation Tip: Read Up on Tesla News

• Spend an hour reading online articles on Tesla. Finance-oriented publications like CNBC , The Financial Times , and Bloomberg are great places to start.
• Watch YouTube videos on recent company stories. Tesla has its own channel and Rob Maurer also runs a very informative YouTube channel called the Tesla Daily .
• Read Tesla’s 10-K annual report. Every public company is required to post a publicly available 10-K company report . I’d recommend taking a look at the section on “Risk Factors” and “Management Opportunities, Challenges, and Risks.” (These sections are perfect for coming up with interesting follow-up questions that you can ask your interviewer).

Sample Questions & Answers

The following should give you an idea of the types of questions that you may be asked in these phone screen interviews.

Q: Why do you want to work for Tesla?

Sample Answer:

“Tesla seems to be a very dynamic and innovative company. With this in mind, I figured that this type of work exposure, particularly at the junior level, would be extremely rewarding as I would be forced to learn many things in a rapid environment. Although this may seem daunting for some, I’ve always been the type to throw myself into challenging situations to force myself to figure things out. Tesla has made tremendous progress since its first factory opening in Fremont, California and I’d simply love to take part in its massive global mission.”

Q: Where do you see yourself in 5 years?

“It’s hard to answer that question specifically as 5 years is quite a long time. What I can say is that I would like to spend the first few years of my analyst career learning the little details and all the ins and outs of the business. Then, after building up my fundamentals and overall experience, I would like to transition into a role that would allow me to make thoughtful and impactful business decisions.”

Q: What do you like to do outside of work and school?

“I really enjoy going fishing when I have some free time over the weekend. Although it seems like fishing is a relatively relaxed activity, I actually really enjoy the strategic side of a fishing operation. Whether it's looking a weather and wave height reports or researching specific species and testing different baits and fishing equipment, I actually really enjoy the process of testing out different theories to find what works best for me.”

#3 Excel Case Study Interview

If you make it past the phone screen stage, you’ll likely move on to an Excel case study interview. To prepare for this Excel case study test, I recommend you make sure you are comfortable with basic Excel skills and finance fundamentals.

Excel: In my case study, I ended up using simple formulas like SUMIFS and VLOOKUPS and I didn’t have to use pivot tables or macros. That said it certainly wouldn’t hurt to learn pivot tables and other Excel functions as they’ll likely switch up the case studies every now and then.

Finance: The Excel case study (at least when interviewing for the financial analyst role) is very much finance oriented. At a minimum, make sure you understand the ins and outs of an income statement so that you can comfortably solve for gross and net profit margins, EBITDA, etc.

General Tip: They will likely ask you for your insights or recommendations given the figures and data available. If certain figures or assumptions seem a bit high, perhaps you could recommend the analyst to speak with the manufacturing team or distribution team for more details on mandatory vs optional expenses (this makes it seem like you are familiar with real work scenarios).

If you’re interested in learning more about how you can best prepare for your interviews, consider checking out our Excel for Business & Finance Course and our Complete Finance & Valuation Course . These two courses should help you comfortably tackle finance interviews at the most competitive corporations and investment banks!

#4 Final Round: 4-5 Back-to-Back 30-Minute Interviews

If you make it past the Excel case study test, you’ll likely have an opportunity to take part in a final round interview consisting of 4-5 back-to-back 30-minute interviews with members from various finance teams.

These interviews will consist of mostly technical and brain teaser questions. With this in mind, you should expect to open up Excel during the interview to share your screen and walk through mini case studies and teaser problems.

General Tip: Once you find a reasonable solution, don’t just stop at the numerical answer. The interviewer wants to see how you can connect the data to actionable business ideas. You’ll usually want to make some surface-level assumptions to arrive at a figure, then tell your interviewer the types of follow-up questions you would ask if you had more time to work on this in a real business setting.

You should also expect a couple of behavioral questions at the end of the interview alongside an opportunity to ask the interviewer general questions.

The following should give you an idea of the types of problem-solving questions that you might be asked in the final round of interviews.

Q: Tell me 3 different methods that you could use to price a Tesla car entering a new market?

• You can use a competitive pricing model. Simply put, you can look up the prices of competing cars in the new market and price the Tesla car within a certain range of its competitors (maybe plus or minus 5%). It will also be interesting to factor in any potential tax benefits that some countries give to electric vehicle consumers as that could give Teslas a big pricing edge over traditional combustion engine vehicles.
• You can use a cost-based pricing model. In this method, you can add up all the costs required to manufacture and distribute a vehicle. Then you can apply a percentage premium to that cost basis to arrive at the consumer-facing price. Perhaps you could use some industry-standard or comparable markup figure to determine the percentage premium to use.
• You could create a model based on customer income. In this method, you could start by looking at all of the existing markets, and create a ratio using the Tesla prices in those markets relative to the median family income in that area. Once you have that ratio, you can apply it to your new market by finding the median family income in the new area.

Q: Identify the bottleneck of the car manufacturing line given XYZ data

This question will likely require you to use simple math to figure out which stage in the production line is taking up the most time. Once you figure out the bottleneck, the interviewer might ask you a follow-up question modifying the figures of the original scenario.

For example, your interviewer might say: “If you were presented with the opportunity to invest $X amount of dollars to cut down the bottleneck time by 25%, would you proceed with the project?”

To approach this problem, you would likely have to calculate how much more product you would be able to produce and the dollar value of that additional product. From there, you could calculate the payback period or essentially how long it would take for the additional profits to cover the cost of the initial investment.

#5 Job Offer!

If you make it past the final round of interviews, congratulations, you’ll likely receive an email and a call from the HR team.

If you don’t get the job offer, don’t worry and keep your chin up. It’s already quite an accomplishment to make it to the final round of interviewers. Even if you don’t end up at Tesla, you can still apply to many other great companies like Apple, Amazon, Visa, and more.

If you're fishing around for a new job, consider signing up for our weekly newsletter for more career news and interesting job opportunities that we find at fortune 500 companies across the globe.

Additional Resources

If you’re looking to better prepare your technical skills for any competitive business or finance interviews, consider checking out our courses using the get started button below!

Other Articles You Might Find Useful

• Interview With a Tesla Financial Analyst
• Goldman Sachs Interview Process
• Investment Banking Target Schools
• Accounting Internships
• Goldman Sachs Interview Questions

Building a cash flow statement from scratch using a company income statement and balance sheet is one of the most fundamental finance exercises commonly used to test interns and full-time professionals at elite level finance firms.

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Your Financial Due Diligence Interview Guide

Interview prep resources to help you get a job in financial due diligence. 

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Everything you need to ace your interviews in one place…

Interview questions.

Comprehensive list of technical and behavioral interview questions

Learn what to expect in financial due diligence cases and how to ace them

Excel model

Learn the fundamentals of a quality of earnings analyses and key excel skills

Example scope of work

See the key steps and analyses that are involved in an FDD engagement

Example request list

Get access to real-world target company requests for FDD

Interview process

Develop an understanding of the full FDD interview process

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#1 resource for financial due diligence interviews, full interview guide.

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Learn more about the financial due diligence career path and interview process

Financial Due Diligence Interview Mini Guide

A career in Financial due diligence (FDD) or Transaction advisory (TAS) is arguably the best career path for accountants. The valuable skillsets acquired in FDD will accelerate your career and open doors that are closed to most professionals. However, getting a coveted position in this industry boils down to your preparation. The interview process is devoted to determining if you are intelligent, capable, reliable, and a good cultural fit.

Most likely, you are coming from a field like audit and assurance, financial analysis, or consulting. First off, congrats on making it this far. But next, realize that you still have a long way to go. Competition for FDD roles is stiff, and you need to fine-tune your strategy in order to land a job. That’s why we’ve created the best FDD interview guide on the market. Our guide was designed by FDD professionals with several years of experience working for the best Big 4 and middle-market firms in the U.S.

What is FDD? 

Financial due diligence is a comprehensive analysis of a company’s financial and operational information to evaluate its financial health, growth potential, and risk profile. This process is typically performed during the due diligence phase of an M&A transaction to assess the target company’s financial viability and identify any potential risks. Financial due diligence includes reviewing financial statements, operations, financial management, and market conditions to provide a complete picture of the company’s financial strengths and weaknesses. 

Arguably the main objective of financial due diligence is to provide a clear understanding and confirmation of a company’s historical performance. In order to provide a clear picture of historical performance, FDD professionals must ensure that historical earnings are accurately presented. The financial due diligence process is intended to provide a non-biased, accurate presentation of a company’s historical financial performance. Through the process, the FDD firm will provide the client with a few standard deliverables:  (i) a quality of earnings analysis, (ii) a net working capital analysis, and (iii) a debt and debt-like analysis. 

Quality of Earnings Analysis

Quality of Earnings Analysis is a review of a company’s financial statements, focusing specifically on the quality and sustainability of its earnings. It is a comprehensive analysis of a company’s revenue, expenses, and cash flow, designed to determine whether the company’s earnings are based on genuine, recurring revenue sources or if they are artificially inflated through one-time events, aggressive accounting practices, or other factors.

A quality of earnings analysis typically includes a review of key financial metrics, including revenue growth, gross margins, operating expenses, and cash flow. It also examines the company’s accounting practices, identifying any unusual transactions or red flags that may indicate artificially inflated earnings. The goal of a quality of earnings analysis is to provide a clear understanding of the quality and sustainability of a company’s earnings, which is critical information for investors and other financial professionals who are evaluating the financial health of a company.

Net Working Capital and Debt-like Analysis

Net Working Capital and Debt-Like Analysis is a review that focuses on a company’s liquidity and its ability to meet its short-term obligations. This analysis typically includes a review of the company’s current assets and liabilities, including cash, accounts receivable, inventory, accounts payable, and short-term debt.

Net working capital is calculated as the difference between a company’s current assets and its current liabilities. This calculation provides an understanding of the company’s ability to meet its short-term obligations and pay its bills.

The debt-like analysis focuses on the company’s long-term obligations, including any debt or other liabilities that may affect its ability to meet its financial obligations in the future.

The goal of the net working capital and debt-like analysis is to provide a clear understanding of a company’s liquidity and its ability to meet its financial obligations. This analysis is critical information for investors and other financial professionals who are evaluating the financial health of a company and its ability to meet its financial obligations over time.

Financial Due Diligence Interview Process

The interview process is designed to assess the candidate’s skills and experience, as well as their understanding of financial due diligence, accounting, and financial analysis.

Here are some tips for preparing for a financial due diligence interview:

• Research the FDD firm: Before the interview, research the company’s background, services, and core values. 
• Review common financial accounting terms and concepts: FDD interviews often include discussions of financial statements, accounting principles, financial ratios, and other key financial concepts. Brush up on these concepts to ensure that you are familiar with the common terminology and able to discuss them confidently in the interview.
• Review your own experience and qualifications: Prepare a list of your own qualifications and experience, including the specific financial-related projects that you have worked on, the industries you have experience in, and the tools and techniques you have used in your work.
• Practice your case-study skills: Many financial due diligence interviews include case studies or scenario-based questions. Prepare for these by practicing your case-study skills and by preparing answers to common questions about your previous experience.
• Dress professionally: Dress professionally and arrive on time for the interview. Be polite and professional throughout the interview process.
• Be prepared to ask questions: Show your interest in the company and the role by asking thoughtful questions during the interview. This can demonstrate your knowledge of the company and the role, as well as your commitment to the financial due diligence process.

By preparing for a financial due diligence interview, you can demonstrate your knowledge, experience, and commitment to the role, and increase your chances of landing the job.

Our study guide provides an in-depth overview of each of these key workstreams, example adjustments, and an example case study. 

Transaction Advisory Services (TAS) Interview Resources

• Financial Due Diligence / Transaction Advisory Case Study Interview
• Financial Due Diligence (Transaction Advisory) Interview Questions and Answers
• Financial Due Diligence vs. Audit
• Why work in Financial Due Diligence (or Transaction Advisory Services aka TAS)?
• Financial Due Diligence (FDD or TAS) Interview Process
• Financial Due Diligence Exit Opportunities