Big companies offer extensive training to all new hires and new analysts in the team. They teach them what expense models they should use, how to create reports, and how to take care of other working duties. Nevertheless, recruiters still prefer to hire candidates who can talk about their job, and have good understanding of common terminology.
So, can you explain financial models?
Financial modelling is an exercise in either asset pricing or corporate finance, an exercise of quantitative nature. Saying it differently, it is about translating a set of hypotheses about the behavior of markets or agents into numerical predictions. To show you an example, based on the hypotheses that dollar will grow constantly the next year, a rise of the trade deficit will be 5%.
As you can see, you should not only tell what financial modeling is, you should also give a practical example. Interviewers should see that you do not only read books and repeat definitions, but also understand what the definition mean for you, and for their business.
Do not forget that job interview is not an exam at school. They want you to do more, to always show the practical application of the theory.
At the end of the day, you should not forget that technical questions are what they are–technical. Recruiters expect a simple but precise answer. If they ask about ROI, you should say return on investment. Nothing more, nothing less.
What to say at the end?
Congratulations! You came to the last answer. We hope the content helped you to understand better what to expect in your financial analyst interview, and how to prepare for the meeting with the employer. If you’d like to see even more–content that’s not available for general public, such as multiple answers to all tough behavioral and technical questions, as well as practical case studies and winning interview strategies, you can check my eBook, the Financial Analyst Interview Guide. Regardless of your next step, I wish you good luck in your interview!
Jeremy Hopkins, Your Personal Interview Coach