In order to achieve this, the budget needs to be an iterative process that includes all departments. A good budget is one that has buy-in from all departments in the company, is realistic yet strives for achievement, has been risk-adjusted to allow for a margin of error, and is tied to the company’s overall strategic plan. If it were up to you, what would our company’s budgeting process look like? #ANYLIST INTERVIEW DRIVER#You can probably pick a different answer for this question, but you need to provide a good justification (e.g., the balance sheet because assets are the true driver of cash flow or the income statement because it shows the earning power and profitability of a company on a smoothed out accrual basis). Ironically, it often gets the least attention. The statement of cash flows gives a true picture of how much cash the company is generating. If I could use only one statement to review the overall health of a company, which statement would I use, and why?Ĭash is king. The cash flow statement shows cash inflows and outflows from three areas: operating activities, investing activities, and financing activities. The income statement outlines the company’s revenues, expenses, and net income. The balance sheet shows a company’s assets, liabilities, and shareholders’ equity (put another way: what it owns, what it owes, and its net worth). Demonstrate your line of reasoning (show that you have a logical thought process and can solve problems, even if you don’t know the exact answer).įinance Interview Questions (and Answers): Walk me through the three financial statements.
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