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Accounting Interview Questions

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					Accounting Questions: 1. You buy a $100 asset. $25 cash, $50 debt, and $25 new equity. Explain how the 3 financial statements (IS, BS, CFS) will change. 2. How are the 3 financial statements related to each other? 3. Name 3 ways in which the Income Statement and Balance Sheet are related (item on one is related to item on another). 4. What happens to each of the three primary financial statements when capital expenditures decrease? 5. What happens to each of the three primary financial statements when gross margin decreases? 6. What happens to each of the three financial statements when working capital increases? 7. What is the current ratio and why is it important? 8. What is the acid-test ratio? 9. What is the main link between the income statement and the balance sheet? 10. Walk me through the major line items on a cash flow statement. 11. Are you good at accounting? 12. What is the opposite journal of account receivables? 13. What are the main items on the balance sheet? 14. If you only had one financial statement to choose from which would it be? 15. What happens if LIFO Price Increases? 16. If company A owned its stores and company B leased its stores, which would have the higher EBITDA? 17. Who would have a higher EBITDA, capital leases or operating leases? 18. What’s deferred tax? 19. You are provided with five year financial projections that show working capital dropping to zero in year five. How would you interpret this? 20. Where do you get Depreciation and Amortization? 21. Where do you get Capital Expenditures? 22. Where do you get working capital? 23. What would happen to a company’s stock if it announced a large loss due to a write down on goodwill?


				
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Description: Investment Banking Interview Preparation