EY Interview Questions & Answers

Can you describe your accounting background and relevant experience?

What activities are included in a cash flow statement?

How would you address an error made by one of your team members?

How would you address a questionable business expense submission?

What are adjustment entries, and how do you record them?

What are adjustment entries, and why are they important in accounting?

How do you analyze a company's financial statements effectively?

What methods would you use to assess a company's value?

What methods do you use to assess a company's liquidity, profitability, and credit history?

What distinguishes an audit from a review in financial reporting?

What is the average Price/Earnings (P/E) ratio of the S&P 500 Index?

How do you calculate levered and unlevered beta, and why is it important in financial analysis?

Can a company report negative book equity?

Can a company have positive cash flows while facing serious financial difficulties?

Can a company have a positive net income and still declare bankruptcy?

Can a company report positive net income while still facing bankruptcy?

What is capital budgeting, and what techniques are commonly used in the process?

When should a purchase be capitalized instead of expensed?

Can a cash flow statement alone determine a company's financial health?

What is a cash flow statement, and how does it function in financial reporting?

Can you explain the cash flow statement in detail and describe its functionality?

Which is more important for a business: cash flow or assets?

As a CFO, what would be your top priorities and concerns for the company?

Can you describe a challenging financial decision you made and the outcome?

What is one change you would make to the financial system, and why?

Which is more cost-effective: debt financing or equity financing?

What are the most common valuation multiples used in finance?

What single statement would you choose to assess a company's overall health, and why?

What makes you a strong candidate for the investment banking analyst role?

What is cost accountancy, and what are its main objectives?

What is the cost of capital, and why is it important in financial decision-making?

Can you explain what deferred tax assets are?

What are Deferred Tax Assets (DTA) and Deferred Tax Liabilities (DTL), and how are they generated in a merger or acquisition (M&A) transaction?

What is a deferred tax liability, and what causes its creation?

Can you explain what a deferred tax liability is?

What is a Deferred Tax Liability, and how does it impact financial statements?

What is the definition of finance?

Can you describe your experience with financial modeling?

How do you develop a rolling budget or forecasting model?

What is the difference between cash and accrual accounting, and which method do you believe is more suitable for our business?

What is the difference between cash accounting and accrual accounting?

What is the difference between earnings per share (EPS) and diluted normalized earnings per share?

What discount rate do you use in a DCF valuation, and why?

What is the Discounted Cash Flow (DCF) method?

Can you explain the Discounted Cash Flow (DCF) method and its significance in financial analysis?

What distinguishes accounts payable from accrued expenses?

What distinguishes working capital from long-term capital?

What are Earnings Per Share (EPS) and Diluted Earnings Per Share (Diluted EPS)?

What does EBITDA stand for, and why is it important in financial analysis?

What are the most effective strategies to prevent accounting fraud?

What does Enterprise Value mean in finance?

What skills and qualities are essential for an effective FP&A analyst?

How would you evaluate the potential benefits and risks of a merger with [competitor name]?

What factors influence price-to-book (P/B) multiples, and why might two companies in the same industry have different P/B multiples?

How should a finance administrator role be effectively filled?

Can you describe a financial model you have developed and explain its purpose and key components?

What financial reports do upper management require, and what are their purposes?

What single financial statement would you use to assess a company's overall health, and why?

What are financial statements, and what insights do they provide about a company?

What is the formula for calculating the price-to-earnings (P/E) ratio?

What is the formula for calculating the Weighted Average Cost of Capital (WACC)?

What are the four main financial statements?

What is Free Cash Flow (FCF), and why is it important for evaluating a company's financial health?

What is GAAP and why is it important in accounting?

What is goodwill in accounting, and why is it important?

What is your greatest career achievement in finance?

How would you handle a conflict between two accountants you supervise?

How do you handle disagreements with subordinates?

How would you handle discovering an error in your calculations?

How do you handle errors in reporting?

How would you handle a significant discrepancy found in our accounting records?

How do you handle stress and long hours in a finance career?

When might a company exhibit a high EV/EBITDA multiple but a low PE multiple?

Which company is likely to have a higher WACC: one with a $100 million market cap or one with a $100 billion market cap?

What valuation methodologies typically yield the highest company valuations?

How does this affect the company's net income?

How do the three main financial statements connect?

What does an ideal budgeting process look like for a company?

What is an ideal Debt-to-Capital ratio?

How does the income statement connect to the balance sheet?

How do increases in accounts receivable affect cash flow on the cash flow statement?

What does the inventory turnover ratio indicate?

What is the key component of a financial report?

Can you explain the key components of an Income Statement?

What are the key differences between equity financing and debt financing?

What are the key differences between valuing a resource company (like oil, gas, or mining) and valuing a traditional company?

What key elements define an effective financial model?

What key elements contribute to a successful financial plan or budget?

What are the key factors driving mergers and acquisitions?

What key features define an effective FP&A financial model?

What are the key responsibilities you anticipate as an accounts assistant?

What are the key valuation methodologies used in finance?

What are the key valuation multiples used to assess a company's worth?

What are the limitations of using individual financial statements for evaluating a company's overall performance?

What are the main elements of discounted cash flow analysis?

What is the market risk premium and why is it important in finance?

How do your mathematical and quantitative skills align with the requirements of a career in accounting?

What is the meaning of negative working capital?

What is the method for calculating terminal value in a DCF valuation?

What methods do you use to assess a company's value?

Why is the mid-year convention used in DCF valuation?

How do you model a company's operating expenses effectively?

What is your approach to modeling a company's revenue?

How do you motivate a tax team effectively?

What does a negative change in net working capital on the cash flow statement indicate, and is negative working capital detrimental to a company?

How would you negotiate a deal when you and the seller have differing views on the asset's future performance and price?

What is the net debt if the enterprise value (EV) is $80 million and the equity value is $40 million?

What is your process for organizing financial reports?

Can you explain a scenario where a company exhibits positive cash flow yet faces financial difficulties?

What are the primary functions of an investment banking division?

What is the present value of a perpetual cash flow of $200 at a total cost of capital of 10%?

How does purchasing new equipment impact a company's financial statements?

What is the purpose of changes in working capital on the cash flow statement?

What are the reasons a company might choose to issue equity instead of debt for funding operations?

What recent financial challenge did you face, and how did you successfully resolve it?

What is the relationship between accounting and finance?

How do you stay updated on changing regulations in your industry?

How do you stay updated on changes in tax laws?

What strategies do you use to reduce errors in your work?