Feb 2025

Technical interview question about Financial Health Analysis for Senior-Level Investment Banking

How would you evaluate the financial health of a company before recommending it for a merger?

Investment Banking

Technical

Asked at

Bank of America Merrill Lynch

Difficulty :

Hard

Explanation

This question assesses your ability to conduct a comprehensive financial analysis to determine merger suitability. Recruiters evaluate your understanding of financial statements, key metrics, and potential synergies. Common pitfalls include focusing too much on one aspect, such as profitability, and ignoring other critical factors like debt levels or cash flow. A strong answer demonstrates a structured approach, highlighting the balance sheet, income statement, and cash flow analysis, along with qualitative factors. Preparation involves reviewing financial analysis case studies and merger processes.

Answer Example

I would begin by reviewing the company’s financial statements to assess profitability, liquidity, and solvency. Key metrics like EBITDA margins, debt-to-equity ratio, and free cash flow would help evaluate its financial stability. Additionally, I’d analyze industry trends and potential synergies with the acquiring company, such as cost savings or revenue enhancements. For example, during a case study, I identified a target company with a 15% EBITDA margin and low leverage, which led to a successful merger recommendation with $50M in projected synergies.

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Feb 2025

How would you evaluate the financial health of a company before recommending it for a merger?

Technical

Asked at

Bank of America Merrill Lynch

Difficulty :

Hard

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Explanation

Answer Example

Also check out

What is your process for designing levels that are both challenging and enjoyable for players?

Creative Thinking

Asked at

Naughty Dog

Difficulty :

Medium

How do you stay informed about market trends and their impact on asset management?

Analytical/Technical

Asked at

Fidelity Investments

Difficulty :

Easy

How do you ensure compliance with regulations and sustainability standards in the supply chain?

Ethics and Integrity

Asked at

Unilever

Difficulty :

Hard

What steps would you take to ensure a consistent brand message across multiple marketing channels?

Communication Skills

Asked at

Unilever

Difficulty :

Easy

What strategies would you use to help banks identify and mitigate emerging risks, such as climate-related financial risks?

Analytical

Asked at

EY (Ernst & Young)

Difficulty :

Hard

Designed to be stress-free.

Step 1: Upload Resume

Step 2: Paste Job Description

Step 3:Download and Apply

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