Asset Management
66 financial analysis questions of the kind asked in asset management interviews. Each carries a model answer, the concepts a complete response must hit, and graded feedback on your own attempt.
Tests whether a candidate can interrogate the metrics in a SaaS growth-company dashboard.
Define ARR, bookings and recognised revenue. A company reports strong bookings but weak revenue growth. What would you ask next?
Technology coverage analysts regularly reconcile operating KPIs to reported growth before discussing a software issuer with investors.
A SaaS company begins the year with $100m of ARR. Existing customers expand by $12m, contraction is $4m, churn is $6m, and new customers add $18m. Calculate ending ARR, net revenue retention, gross revenue retention and…
Used to test whether a growth investor can separate headline growth from capital efficiency.
A company burned $18m of cash over the last twelve months and increased ARR from $30m to $42m. Calculate its burn multiple. What would you investigate before using it to make an investment decision?
Portfolio associates are expected to explain simple cap-table changes clearly to founders and investment partners.
A portfolio company has 8.0m fully diluted shares before a financing and needs to create a 400,000-share option refresh immediately before the round. Calculate the dilution to existing holders from the refresh alone. Why…
Tests whether a corporate development analyst can reconcile headline consideration to the cash actually paid at closing.
A signed deal uses a $30m net-working-capital peg. At closing, accounts receivable are $18m, inventory is $11m, and accounts payable plus accrued operating expenses are $7m. Cash and debt are excluded. What is net…
A basic portfolio-support question used to test financial discipline.
A portfolio company has $18m of cash, burns $1.2m per month today, and expects burn to rise by $0.1m per month for the next six months. How do you assess runway and when should it start fundraising?
Tests whether a candidate can distinguish management reporting from useful operating information.
How would you choose the KPIs for a portfolio company board pack?
Tests basic acquisition economics and whether the candidate can distinguish an achievable benefit from an attractive headline.
What are cost and revenue synergies? Which should a buyer rely on more heavily when setting a price, and why?
A basic calculation and interpretation check in equity research and portfolio-management screens.
You buy a share at $100. One year later it is $108 and it paid a $3 dividend. The company’s EPS rose from $5.00 to $5.40. Decompose the shareholder return and explain what you would investigate next.
A standard FP&A follow-up when revenue may be on plan but profitability is not.
Revenue is on budget, but gross margin falls from 60% to 55%. How would you investigate and explain the decline to the CFO?
A portfolio-operations screening question before a pricing or mix programme begins.
A portfolio company reports that its top customer is highly profitable because it buys $12m of product at a 35% gross margin. What does a cost-to-serve analysis add, and how would you use it?
Portfolio reviews reveal whether candidates can recognise when a clean-looking metric is misleading.
A founder reports net revenue retention of 118%, but finance calculates 104%. How do you resolve the difference before using the metric in a board meeting?
A basic modelling screen for research associates who will update consensus-facing earnings models.
A company earns $240 million of net income and has 120 million diluted shares. What is EPS? If a $60 million after-tax charge is excluded from adjusted earnings, what is adjusted EPS, and what must you check before…
The foundational buy-side question. Understanding the difference is essential for the role.
Explain the key differences between buy-side and sell-side research. How does the focus, time horizon, and incentive structure differ?
Tests whether a candidate understands floating-rate loan sensitivity.
A company has $80m of floating-rate debt at SOFR + 550bp and $20m of EBITDA. SOFR rises from 3% to 5%. Calculate cash interest and EBITDA-to-interest coverage before and after the move.
Asked when a sponsor needs cash improvement without cutting productive investment.
How would you run a working-capital improvement programme in the first 90 days?
A cash-flow question for capital-intensive businesses.
Why is the split between maintenance capex and growth capex especially important for industrials?
Liquidity risk is a core risk-management topic for funds, dealers and asset managers.
A portfolio has attractive daily VaR but owns several thinly traded credit instruments. Why can it still be risky, and how would you measure the liquidity risk?
A first-round metric question that tests whether you can explain retention rather than merely define it.
What is net revenue retention, and why do growth equity investors care about it?
A basic industrials margin question.
Why do industrial companies often have high operating leverage?
An analyst-level arithmetic check used when preparing an issuance summary and sources-and-uses bridge.
A company issues $500 million face amount of 10-year notes at 99.25. Underwriting fees are 35 bps of face amount and legal, rating, and printing costs total $0.60 million. Calculate gross cash proceeds, total transaction…
A junior research exercise testing whether you can reconcile a headline growth rate before accepting management's narrative.
A consumer company reports revenue rising from $500m to $550m, or 10%. Management says acquisitions added 6 percentage points and foreign exchange added 2 percentage points. What was organic growth, and what would you…
A first-round check that an analyst can read a PM's daily P&L report rather than repeat the headline number.
A PM reports $4.0m of gross security-selection P&L for the month. Index hedges lost $0.9m, trading costs were $0.3m and financing cost $0.4m. What net P&L should the platform report, and what would you investigate next?
A first-round industrials coverage question when evaluating whether equipment shipments can create durable service revenue.
A manufacturer has 10,000 machines in service. It sells annual maintenance contracts to 6,500 customers at $4,000 each. Define service attach rate, calculate it here, and explain why an analyst would track it.
A foundational diligence question for software and subscription businesses.
A company reports $30m of ARR. What would you need to know before treating that figure as high-quality recurring revenue?
A simple calculation that reveals whether the candidate knows how to use a common growth-company heuristic.
A software company is growing revenue 32% year over year and has a -14% EBITDA margin. What is its Rule of 40 score? Does it pass the test?
A basic FX-risk distinction expected in multinational corporate treasury interviews.
Explain transaction, translation and economic FX exposure. Which should a corporate treasury team hedge?
A cash-efficiency follow-up common in later-stage software diligence.
What is burn multiple? A company burned $18m of cash to add $12m of net new ARR last year. What does that tell you?
A common software-investing shorthand that interviewers use to test judgement about growth and profitability.
Explain the Rule of 40. A SaaS company grows 32% and has an EBITDA margin of negative 12%: how would you use the result?
A common first-round treasury question because account sprawl creates cost, fraud and visibility problems before it creates a funding problem.
A multinational has 480 bank accounts across 18 banks, many with small dormant balances. Why would treasury rationalise the structure, and how would you do it without disrupting the business?
A basic pricing check in every LP-led case study.
Why do unfunded commitments reduce the price a buyer pays for an LP interest?
A modelling-style prompt used to test whether EBITDA becomes real deleveraging cash.
A borrower generates $30m of EBITDA. Cash interest is $9m, cash taxes are $3m, maintenance capex is $5m, and working capital consumes $4m. How much cash is available for debt paydown? What could make the answer wrong?
Strategic finance analysts use this reconciliation to explain a revenue variance to operating leaders and a CFO.
Last year a company sold 1.0m units at $100 each. This year it sold 1.1m units: 0.8m premium units at $110 and 0.3m standard units at $90. Build a revenue bridge and explain what management should investigate.
A practical research exercise used after an interviewer asks for an investable idea.
Consensus expects a retailer to deliver $1,000m of revenue and a 10% EBIT margin next year. You believe revenue will be $1,050m and margin 11%. How do you translate that into an earnings variant view, and what evidence…
Core question for sell-side and buy-side research associate roles.
You're initiating coverage on a specialty retailer. How do you build the revenue model, and what drives your estimates versus consensus?
A recurring earnings-quality question in research and long/short interviews.
Two identical software companies: one capitalises development costs, the other expenses them. How do their financials differ, and which reports better numbers?
A core seed underwriting calculation that tests whether capital is connected to a de-risking plan.
A startup has $1.8m in cash, burns $150k per month, and plans to raise $3.0m. It expects monthly burn to rise to $250k after six months. Calculate the post-financing runway and explain what you would want the company to…
Earnings quality is critical to avoid value traps. This tests forensic accounting skills.
What metrics and red flags do you look at to assess the quality of reported earnings? How do you distinguish high-quality from low-quality earnings?
The deliverable a new research associate works toward.
You're initiating coverage on a sector with eight companies. Walk me through the process and what the initiation note contains.
Tests whether an associate can turn a live model into a useful pre-results client note.
Your covered company reports in two weeks. How would you prepare an earnings preview that clients can use, rather than a generic summary of the last quarter?
A sell-side research output simulation prioritising what clients need immediately after earnings.
A covered software company reports a revenue beat, an EPS beat and lower full-year margin guidance. Produce the first client flash after validating the moving pieces.
A FIG associate gives this as a short earnings-model check before asking for the credit-cycle implication.
A bank reports $2,400m of net interest income, $900m of fee income, $1,850m of non-interest expense, $420m of provision for credit losses, and $180m of tax expense. Calculate pre-provision net revenue (PPNR), pre-tax…
An industrials coverage analyst often has to explain quickly whether reported growth reflects end-market demand or acquired and translated revenue.
An industrial company reports revenue rising from $1,000m to $1,120m. Management says the bridge was 6% price, 3% volume, 4% acquisitions and a 1% FX headwind. Reconcile the growth and explain what you would test before…
A modelling-screen exercise testing whether a candidate can distinguish top-line growth from the economics produced by that growth.
A software company grows revenue from $24m to $36m while gross margin rises from 60% to 70%. Calculate prior-year gross profit, current-year gross profit, and the incremental gross profit. Why is this more useful than…
A managed-care earnings review tests whether you can turn a headline medical-cost ratio into a clean operating-profit bridge.
A Medicare Advantage insurer reports $1,000m of premium revenue, $840m of medical claims and $80m of administrative expense. Calculate its medical cost ratio and operating profit. If claims rise by $20m with all else…
A practical operating-partner case on translating an efficiency claim into the financial plan.
A distribution business has 200 warehouse employees, each costing $60,000 annually. Management says a new picking process will raise output per employee by 15% and deliver $3m of EBITDA. How would you reconcile the claim…
A cap-table exercise used to test whether an analyst can reconcile headline valuation, ownership and pre-money option-pool dilution.
Two founders own 8.0m shares. Before a priced seed round, the investor requires a 1.0m-share option pool to be created. The investor puts in $2.0m for 20% post-money ownership. Calculate the investor shares, each party's…
A practical liquidity-reconciliation question for a restructuring analyst reviewing an asset-based revolver.
A retailer has $80m of eligible receivables at an 85% advance rate and $50m of eligible inventory at a 60% advance rate. Its revolver commitment is $90m, outstanding borrowings are $78m and letters of credit total $4m.…
A practical diligence-to-execution question for operating teams.
A company claims $10m of procurement savings. How do you validate that the savings are real?
A practical underwriting follow-up after management presents adjusted EBITDA.
Management reports $20m of adjusted EBITDA, including $3m of restructuring costs and $2m of projected synergies from an acquisition that has not closed. How would you decide what EBITDA to underwrite?
An earnings-season question that tests whether you can separate headline results from durable economics.
A company beats quarterly EPS by 12%, but revenue is in line. How would you decide whether the beat improves your investment thesis?
An E&P coverage analyst is expected to turn a benchmark price deck into a realised-price and cash-flow forecast.
An E&P company forecasts 10 million barrels of production. Your WTI deck is $75/bbl, but its basin has a $6/bbl transport differential, and 40% of volumes are hedged at $70/bbl. Calculate the blended realised price…
A live-deal update question for a secondaries investment team.
You are underwriting an LP portfolio whose largest asset is marked at 14.0x EBITDA. A new quarterly report shows revenue grew 4% versus the budgeted 12%, EBITDA is 8% below plan, and net debt is $40m higher after a…
Asked because industrials can burn cash while reported earnings improve.
Why can a manufacturing company burn cash during a revenue recovery?
Tests whether a candidate can combine valuation and liquidity risk in a fund-level case.
What should a credible downside case include for a secondary portfolio?
Healthcare coverage analysts must distinguish prescription demand from net-sales quality during an earnings miss.
A specialty-pharma company says prescriptions rose 12% and gross sales rose 10%, but reported net sales fell 3%. Management attributes the gap to gross-to-net deductions rising from 28% to 39%. How would you diagnose the…
Common in equity research, credit and restructuring interviews.
You're handed three years of financials for a company you don't know. Name the specific red flags you'd screen for and explain what each one might indicate.
A CFO review case testing whether the candidate can connect operating performance, working capital, and an immediate liquidity response.
A company beats its quarterly EBITDA plan by $4m but generates $9m less operating cash flow than forecast. Revenue is on plan. Inventory is $7m above plan, receivables are $5m above plan, and payables are $3m above plan.…
A portfolio-support case for an AI application company scaling revenue faster than its infrastructure economics.
A portfolio company has doubled ARR to $20m, but gross margin fell from 72% to 48% as enterprise customers use more inference-heavy features. Management wants to accelerate sales hiring before the next raise. What would…
A secondaries case-study prompt that tests whether a candidate discounts cash flows rather than anchoring on NAV.
You can buy an LP interest for $72m. Its reported NAV is $90m, with $10m of unfunded commitments. Your base case assumes $20m of distributions in year one, $35m in year three, and $45m in year five, with the $10m…
A sell-side research associate review between an earnings call and a client-facing results flash.
Your analyst asks you to review the model and draft flash on a software company that has just reported. Identify the hidden errors that could mislead clients, prioritise the repairs, and write the review handoff.
A post-results modelling case testing whether an associate can separate a superficially in-line quarter from a changed earnings algorithm.
Your covered company reports EPS exactly in line with consensus. Segment A revenue grows 12% versus your 8% forecast, but Segment B revenue falls 6% versus your expected flat result. Consolidated EBIT is in line because…
The analytical core of fundamental investing. Expect it at quality-focused shops.
Define ROIC and explain how it relates to growth in creating value. When does growth destroy value? How do you decompose ROIC to find out what's actually driving it?
An industrials coverage case after a distributor order slowdown challenges a management forecast.
An automation supplier misses orders by 12%. Management says distributors are merely destocking and maintains its full-year organic-growth guide. How would you decide whether this is a timing issue or a change in end…
An industrials coverage case testing whether a fixed-price power contract reduces volatility or creates an unpriced operating commitment.
A manufacturer signs a 12-year renewable-power agreement at a rate below current electricity prices. Management calls the contract a $25m annual saving, but its main plant may reduce load by 30% if a product line is…
A senior consumer coverage case for separating manufacturer revenue from underlying demand before advising on valuation or a transaction.
A beverage manufacturer reports shipments to distributors down 12% year over year. Distributor inventory fell from 10 weeks to 6 weeks, while retailer point-of-sale sales were flat. Management says the business is…
Write your answer, get it graded on technical accuracy, completeness and communication, and see exactly which mechanic you missed.
Firm names indicate where a question type is commonly reported in interviews. They are not sourced from, endorsed by, or affiliated with the firms named.