This question assesses the candidate’s financial analysis skills. The applicant’s answer will indicate their financial analysis knowledge and decision-making process. This information is vital because financial analysts must be able to assess the value of investments. Answers can include:

• Return on Investment
• Experience of achievement
• Desire to grow

The reason for this question is to determine the candidate’s fundamental knowledge of financial information. The answer explains the candidate’s basic understanding of the income statement and financial analysis skills. It is important to know this because financial analysts need an understanding of accounting information, such as the income statement’s line items, to properly evaluate the company’s finances. Answers to look for include:

• Not firm income
• Listed under shareholder equity
• Income statement only contains strong income

This question assesses the candidate’s risk assessment skills. The candidate’s answers show strategy for measuring the stock’s performance, confidence level and ability to present findings using examples and reasoning. It is important to understand this because financial analysts must be able to evaluate risk and reward of various financial investment opportunities. Look for answers such as:

• Specific metrics
• Details about the metrics
• Indications of confidence, such as tone and body language

This question evaluates a candidate’s analytical and decision-making skills. The answer shows a candidate’s understanding of financial statements and thought process. It is important to know this information because a financial analyst should understand the ideal statement to reference when analyzing a company’s financial health. Answers to look for include:

• Balance sheet
• Income statement
• Reasons for selections

Producing reports are an essential part of financial analysts’ jobs because financial analysts provide clients with recommendations based on data from these reports. The question demonstrates the candidate’s critical thinking and organizational skills. A candidate’s answer shows their financial analysis reporting methods, including techniques and tools they use. Look for answers that include information about:

• Reporting platforms and tools
• Financial Analysis Report Components
• Analysis Techniques

This question tests the candidate’s analytical skills. The answer demonstrates knowledge of how different line items on the balance sheet relate to one another. This information is important to know because it impacts the decisions financial analysts must make. Look for answers, such as:

• Negative impact on cash flow
• Lowers company’s net worth
• Reduces the value of assets

This question evaluates the candidate’s research skills. The answer will show the applicant’s approach to finding missing information. It is vital to know this because sometimes information is unknown but needed for creating accurate financial analysis. Look for answers that reveal:

• Strategic research approaches
• Software platform use
• Technical approaches

Financial analysts help businesses and individuals review their financial health and make smart investment decisions. This question helps interviewers gauge a candidate's experience working as a financial analyst or a related role. It also allows interviewers to determine a candidate's ability to identify potentially risky activities and address them with their clients. A candidate's answer should outline a course of action for speaking with clients and working toward a solution to uphold their finances. The candidate's answer should emphasize:

• Problem-solving skills
• Communication skills
• Financial competency

Here's one potential answer to this question: