In recent months I have been working with several firms recruiting Corporate Finance positions that have slightly longer interview processes for than usual.
It can sometimes be difficult for Corporate Finance candidates to anticipate how long the interview process might take and what to expect.
I have listed below some of the stages which might be included as part of your Corporate Finance interview.
Case Study / Presentation
A case study or presentation will typically require you to research a company which the firm you are interviewing for would consider to buy or sell.
They will ask for your advice on whether it is a good or bad decision and for your reasoning behind why they should buy or sell the company.
You would also be required to research the financials in detail, have a thorough understanding of the company and a potential projection of the future developments of the business.
It is also a good opportunity for the interviewer to assess how you present and will help them paint a picture of how you may pitch to their clients.
You are likely to be asked the following questions:
What do you feel about the business?
Who would be the best buyer?
Talk me through the financials (profit shares and balance sheet)
Corporate Finance Test
This is normally a general test to see if you understand the process of a transaction. Can you actually talk through a deal from origination to completion?
This test is not too technical but is crucial for interviewers to test your understanding of the basic concepts and processes of Corporate Finance.
You may also be asked to complete calculations on basic financials for example:
Calculate earnings before Interest (Taxes, Depreciation & Amortization (ABITDA))
Calculate Gross Margin (using the information provided)
Calculate Capital Expenditure (using the selected Financial Statement)
Financial Modelling Test
This test is almost certain to come up if you have applied for a role specifically within financial modelling.
This is more of a technical test which will assess your understanding of building models from scratch and reviewing models.
This test will also consist of you completing calculations, for example:
Calculate Free Cash Flow (FCF) (using the information provided)
Calculate the cost of equity(using the data provided)
What is the quick ratio: the current asset is X current liability is X and inventory is X
Attention to Detail Test
This test tends to be quite short and will test you grammatically. This is important to test how good your English is when needing to draft reports and pitches etc. Usually, this would be a PDF document where you have to identify grammatical errors.
Why do companies test candidates?
Having these tests throughout the interview process reassures Corporate Finance companies that you are technically able to do the job you are interviewing for. It also enables them to confirm that you really do have the relevant skills and experience they are looking for.
Although these tests can increase the length of the overall interview process, they also provide you with the opportunity to showcase your knowledge and experience in person, giving you the chance to stand out from the competition.