What are the best interview strategies for working with complex financial models?

1 Build your portfolio

One of the best ways to demonstrate your financial modeling skills is to have a portfolio of your previous or personal projects that you can share with the interviewer. Your portfolio should include examples of different types of financial models, such as discounted cash flow, leveraged buyout, merger and acquisition, sensitivity analysis, and Monte Carlo simulation. You should also document the assumptions, data sources, formulas, outputs, and insights of each model, as well as the tools and software you used. Your portfolio should be well-organized, easy to navigate, and visually appealing.

2 Review the basics

Before the interview, you should review the basic concepts and principles of financial modeling, such as accounting, finance, valuation, and statistics. You should also refresh your knowledge of the relevant industry, market, and company that you are applying for, and be familiar with their financial statements, ratios, drivers, and trends. You should also practice your Excel skills, such as using shortcuts, functions, formulas, formatting, and charts. You can use online resources, books, courses, or mock tests to help you review the basics and test your knowledge.

3 Understand the case

During the interview, you may be asked to build or analyze a financial model. To approach the case systematically and logically, you should first clarify the objective and scope of the model by asking questions about what the interviewer is looking for, main assumptions, inputs/outputs, time horizon, and level of detail. Then plan the structure and layout of the model, sketching out main components such as assumptions, income statement, balance sheet, cash flow statement, valuation, and sensitivity analysis. When building the model, use formulas and functions to link different parts of the model while avoiding hard-coding or circular references. Utilize data validation, conditional formatting, and error checking tools to identify and correct any mistakes or inconsistencies in the model. Finally, analyze results and draw conclusions by interpreting outputs/key metrics such as net present value, internal rate of return, payback period, return on equity, and break-even point. Compare different scenarios/alternatives to identify main drivers/risks of the model while explaining how your model answers the objective and supports your recommendations.

4 Communicate effectively

Throughout the interview, you should communicate effectively with the interviewer, and demonstrate your critical thinking, problem-solving, and presentation skills. Explain your thought process and reasoning as you work on the model, using clear and concise language and terminology. Avoid jargon or technical terms that the interviewer may not understand, and use visual aids and charts to illustrate your points. Highlight the main trends, patterns, and insights that you want to convey. Additionally, ask for feedback and questions to engage the interviewer in a dialogue. Answer any questions that may arise, and provide evidence or examples to support your answers. Working with complex financial models can be difficult but with these strategies you can show off your skills and knowledge to increase your chances of getting your dream job.

5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?