Can you describe your experience with financial modeling?

Mergers and Acquisitions Analyst Interview Questions

Sample answer to the question

I have some experience with financial modeling during my time at university. We had a few projects where we had to create financial models to analyze different business scenarios. We used Excel extensively and learned how to forecast financial statements and evaluate investment opportunities. I also gained some experience with valuation analysis and market research. Although my experience is limited, I am confident in my ability to learn and apply financial modeling techniques in a professional setting.

A more solid answer

During my time at university, I gained practical experience with financial modeling through various projects and coursework. One notable project involved creating a financial model for a hypothetical startup, where I had to forecast revenue, expenses, and cash flows. I used Excel extensively to build the model and conducted sensitivity analysis to assess the impact of different variables. Additionally, I learned different valuation methodologies, such as discounted cash flow and comparable company analysis, to determine the intrinsic value of companies. I also utilized market research to gather valuable data for the financial models. Although my experience is primarily academic, I have a solid foundation in financial modeling and am eager to apply my skills in a professional setting.

Why this is a more solid answer:

The solid answer provides specific examples of the candidate's experience with financial modeling, including details of a project they undertook in university. However, it could still be improved with more emphasis on the candidate's ability to apply their skills in a professional setting.

An exceptional answer

I have a diverse range of experience with financial modeling, both in academic and professional settings. During my time at university, I completed several projects that required advanced financial modeling techniques. For example, one project involved creating a complex merger model for a real estate company, where I had to analyze the financial impact of the merger and prepare detailed financial statements. I also used sensitivity analysis to assess the sensitivity of the model to key input variables. Additionally, I have worked as an intern at a financial consulting firm, where I actively participated in creating financial models for valuation analyses and due diligence processes. I worked closely with senior analysts to gather and analyze data, and I also had the opportunity to present the findings to clients. My experience has not only honed my technical skills but also taught me how to effectively communicate complex financial concepts to non-financial stakeholders.

Why this is an exceptional answer:

The exceptional answer goes above and beyond by providing specific examples from both academic and professional experiences. It highlights the candidate's ability to handle complex financial modeling tasks, including creating a merger model and presenting findings to clients. It also emphasizes the candidate's communication skills and understanding of how financial modeling is applied in a business setting.

How to prepare for this question

Review financial modeling techniques and best practices, including different valuation methodologies.
Take online courses or tutorials to enhance your Excel skills and learn advanced modeling techniques.
Seek out opportunities to work on financial modeling projects, such as internships or volunteer work.
Practice presenting and explaining financial models to non-financial audiences.
Stay updated on industry trends and market research techniques to effectively incorporate them into financial models.

What interviewers are evaluating

Financial modeling