400 Investment Banking Interview Questions & Answers
Graded A+
Walk me through the 3 financial statements. The 3 major financial statements are the income
statement, balance sheet, and cash flow statement
The income statement gives the companies revenue and expenses and shows the net income...
Walk me through the 3 financial statements. ✅The 3 major financial statements are the income
statement, balance sheet, and cash flow statement
The income statement gives the companies revenue and expenses and shows the net income of the
company
The balance sheet shows a snapshot of a companies financial position at a certain date and is comprised
of 3 main components, assets such as cash and inventory, liabilities such as accounts payable and debt,
and equity such as retained earnings and common stock. For the statement to be balanced, Assets equal
liabilities plus equity
The cash flow statement begins with net income, adjusts for non-cash expenses and working capital
changes, and then lists cash flow from investing and financing activities; it provides a clear picture of a
companies ability to generate cash which is essential to the survival of the business
Can you give examples of major line items on each of the financial statements? ✅Income Statement:
Revenue, CoGs, SG&A, Operating income, Pretax income, and net income
Cash flow: Net income, D&A, Stock-based compensation, changes in operating assets &liabilities, cash
flow from operations, CapEx, cash flow from investing, sale/purchase of securities; dividends issued, and
cash flow from financing
How do the 3 statements link together? ✅To tie the statements together, net income from the income
statement flows into the shareholder's equity on the balance sheet and into the top line of the cash flow
statement
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