投行英文面试财务部分经典问题.pdfVIP

1. Walk me through the 3 financial statements?  The 3 financial statements are the Income Statement, the Balance Sheet and the Cash Flow Statement  Income Statement gives the company’s revenue and expenses and goes down to Net Income, the final line of the statement  The Balance sheet shows the company’s Assets (its resources such as cash, inventory and PPE) as well as its Liabilities (such as Debt, Accounts Payable) and finally Shareholders Equity. A = L + OE  The Cash Flow Statements begins with Net Income, adjusts for non-cash expenses and working capital changes and then lists cash flow from investing and financing activities; at the end, it reports the company’s net change in cash 2. How do the 3 statements link together?  To tie the statements together, Net Income from the Income Statement flows into SE on the balance sheet, and into the top line of the cash flow statement  Changes to the balance sheet appear as working capital changes on the cash flow statement, and investing and financing activities affect balance sheet items such as PPE, Debt and SE.  The cash and SE items on the balance sheet acts as “plugs” with cash flowing in from the final line on the cash flow statement 3. Where does depreciation appear on the Income Statement?  It could be a separate line item, or it could be embedded in the COGS or Operating Expense – every company does it differently 4. What happens when Depreciation goes up by $10 on the statements?  Income Statement – Operating Income would decrease by $10 and assuming a 40% tax rate, Net Income would then decrease by $6  Cash Flow Statement – The Net Income would in turn be reduced by $6, but the $10 depreciation is a non-cash expense that get