50+ FactSet Interview Questions and Answers for Freshers

Assets are resources owned by an individual or organization, while liabilities are debts or obligations owed to others.

• Assets can include cash, property, investments, and inventory.

• Liabilities can include loans, mortgages, and unpaid bills.

• Assets are typically viewed as positive, while liabilities are viewed as negative.

• The difference between assets and liabilities is known as net worth or equity.

Factset is a financial data and software company that provides research, analytics, and data solutions to investment professionals.

• Factset offers a wide range of financial data and analytics tools

• It provides real-time market data, news, and research reports

• Factset's software platforms help investment professionals in portfolio management, risk analysis, and quantitative research

• The company serves clients in the financial industry, including asset managers, investment banks, a...read more

Accumulated depreciation is the total amount of depreciation expense that has been recorded for an asset over its useful life.

• It is a contra-asset account that reduces the value of an asset on the balance sheet.

• It is calculated by subtracting the asset's salvage value from its original cost and dividing the result by the asset's useful life.

• It represents the total amount of wear and tear or obsolescence that an asset has undergone over time.

• It is important for calculating the...read more

Semi-variable costs have both fixed and variable components, while variable costs change proportionally with output.

• Semi-variable costs have a fixed portion that remains constant regardless of output, and a variable portion that changes with output.

• Examples of semi-variable costs include utilities, phone bills, and maintenance costs.

• Variable costs change proportionally with output, such as direct materials and labor costs.

• Understanding the difference between these costs is im...read more

Depreciation reduces net income and increases cash flow.

• Depreciation is a non-cash expense that reduces net income.

• Since it is a non-cash expense, it is added back to net income in the cash flow statement.

• This results in an increase in cash flow from operating activities.

• For example, if a company has a net income of $100,000 and depreciation expense of $20,000, the cash flow from operating activities would be $120,000.

• Depreciation also affects cash flow from investing activit...read more

Marginal costs refer to the cost of producing one additional unit of a product, while additional costs refer to any extra costs incurred beyond the initial cost.

• Marginal costs are the cost of producing one more unit of a product, while additional costs are any extra costs incurred beyond the initial cost.

• Marginal costs are variable costs that increase or decrease with the production of one more unit, while additional costs can be fixed or variable costs.

• For example, if a comp...read more

Accrued expenses are liabilities that have been incurred but not yet paid for.

• Accrued expenses are recorded on the balance sheet as a current liability.

• They represent expenses that have been recognized but not yet paid for.

• Examples of accrued expenses include salaries payable, interest payable, and utilities payable.

• Accrued expenses are typically recorded through adjusting entries at the end of an accounting period.

Provision is a liability that is uncertain in timing or amount, while reserve is a portion of profits set aside for specific purposes.

• Provision is a liability that is recognized in the financial statements when there is uncertainty about the timing or amount of an obligation.

• Reserve is a portion of profits that is set aside by a company for specific purposes, such as future investments, contingencies, or dividends.

• Provisions are made for known liabilities, such as bad debts, ...read more

An equity stock holder is an individual or entity that owns shares of a company's stock.

• Equity stock holders have ownership in a company and are entitled to a portion of its profits.

• They can vote on important company decisions and attend shareholder meetings.

• Examples of equity stock holders include individual investors, mutual funds, and pension funds.

Activities in Cash Flow Statement include operating, investing, and financing activities.

• Operating activities involve cash flows from day-to-day business operations, such as sales and expenses.

• Investing activities include cash flows from buying or selling long-term assets, like property or equipment.

• Financing activities involve cash flows related to raising or repaying capital, such as issuing stocks or paying dividends.

• Examples of operating activities: cash received from cus...read more

The golden rules of accounting are basic principles that guide the recording of financial transactions.

• The first golden rule is the Personal Account rule, which states that all personal accounts are debited for the receiver and credited for the giver.

• The second golden rule is the Real Account rule, which states that all real accounts are debited for what comes in and credited for what goes out.

• The third golden rule is the Nominal Account rule, which states that all nominal ac...read more

Direct expenses are related to production while indirect expenses are not directly related to production.

• Direct expenses are incurred in the production process and can be easily traced to a product or service.

• Indirect expenses are not directly related to production and cannot be easily traced to a product or service.

• Direct expenses are variable costs while indirect expenses are fixed costs.

• Examples of direct expenses include raw materials, labor costs, and manufacturing overh...read more

Retained earnings are the accumulated profits of a company that are reinvested into the business instead of being distributed to shareholders.

• Retained earnings represent the portion of net income that is retained by the company after dividends are paid out to shareholders.

• They are reported on the balance sheet under the equity section.

• Retained earnings can be used for various purposes such as funding growth, paying off debt, or acquiring assets.

• They can be positive or negativ...read more

GAAP stands for Generally Accepted Accounting Principles. It is a set of accounting standards and principles used in the preparation of financial statements.

• GAAP is a set of guidelines and principles that govern the accounting and financial reporting practices of companies.

• The main goal of GAAP is to ensure consistency, comparability, and transparency in financial reporting.

• GAAP provides a framework for recording, summarizing, and presenting financial information.

• Some of the ...read more

IFRS stands for International Financial Reporting Standards.

• IFRS is a set of accounting standards developed by the International Accounting Standards Board (IASB).

• It provides a common framework for financial reporting across different countries.

• IFRS aims to enhance transparency, comparability, and reliability of financial statements.

• It is used by companies to prepare their financial statements in a consistent and standardized manner.

• IFRS covers various aspects of financial re...read more

EPS stands for Earnings Per Share, which is the portion of a company's profit allocated to each outstanding share of common stock.

• EPS is a financial metric used to evaluate a company's profitability.

• It is calculated by dividing the company's net income by the number of outstanding shares.

• EPS can be used to compare the profitability of different companies or to track a company's performance over time.

• A higher EPS indicates that a company is more profitable and may be a good in...read more

The gross profit formula calculates the profit made after deducting the cost of goods sold from the total revenue.

• Gross profit = Total revenue - Cost of goods sold

• Total revenue includes all sales revenue generated by the company

• Cost of goods sold includes the direct costs associated with producing or purchasing the goods sold

• Gross profit is an indicator of a company's profitability before considering other expenses

• Example: If a company has total revenue of $100,000 and cost o...read more

Goodwill can be calculated using the acquisition method or the impairment method.

• Acquisition method involves subtracting the fair value of net assets acquired from the purchase price.

• Impairment method involves comparing the carrying value of goodwill to its implied fair value.

• Goodwill is only recognized in a business combination.

• Goodwill is tested for impairment annually or when there is a triggering event.

• Goodwill is not amortized but is subject to impairment testing.

Bond interest rate is called yield.

• The bond interest rate is commonly referred to as yield.

• Yield represents the return on investment for bondholders.

• It is expressed as a percentage of the bond's face value.

• Yield can be fixed or variable depending on the type of bond.

• For example, a 5% yield means the bond pays 5% interest annually.

Derivatives are financial contracts that derive their value from an underlying asset or security.

• Derivatives can be used for hedging or speculation.

• Examples of derivatives include futures, options, and swaps.

• Derivatives can be traded on exchanges or over-the-counter.

• Derivatives can be used to manage risk or to take on additional risk for potential profit.

• Derivatives can be complex and require specialized knowledge to understand and trade.

Preferred stock is a type of stock that pays fixed dividends, while debenture is a type of debt instrument with no collateral.

• Preferred stock represents ownership in a company, but usually does not come with voting rights.

• Preferred stockholders receive fixed dividends before common stockholders.

• Debentures are unsecured debt instruments issued by corporations or governments.

• Debenture holders are considered creditors of the company and have a higher claim on assets in case of b...read more

IPO stands for Initial Public Offering. It is the first time a company's stock is offered to the public.

• IPO is a way for companies to raise capital by selling shares of their stock to the public

• It is a process where a private company becomes a public company

• The company hires an investment bank to underwrite the IPO and help set the price of the shares

• Examples of successful IPOs include Facebook, Alibaba, and Uber

Depreciation methods include straight-line, declining balance, and sum-of-the-years' digits.

• Straight-line method charges an equal amount of depreciation each year.

• Declining balance method charges a higher percentage of depreciation in the early years of an asset's life.

• Sum-of-the-years' digits method charges more depreciation in the early years and less in the later years.

• Other methods include units of production and MACRS.

• Depreciation methods are used to allocate the cost of...read more

Mutual funds are investment vehicles that pool money from multiple investors to invest in a diversified portfolio of securities.

• Mutual funds provide diversification, allowing investors to spread their risk across multiple securities.

• They are managed by professional fund managers who make investment decisions on behalf of the investors.

• Mutual funds offer liquidity, allowing investors to buy or sell their shares at the end of each trading day.

• They provide access to a wide range...read more

Equity represents ownership in a company, while mutual funds pool money from multiple investors to invest in a diversified portfolio of securities.

• Equity is a type of security that represents ownership in a company, giving shareholders voting rights and a share of profits.

• Mutual funds are investment vehicles that pool money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities.

• Equity investments carry higher risk but also offer the...read more

Working capital is the difference between a company's current assets and current liabilities.

• Working capital is essential for a company's day-to-day operations.

• It indicates the company's liquidity and ability to meet short-term obligations.

• Formula: Working Capital = Current Assets - Current Liabilities

• Examples: Cash, accounts receivable, inventory are current assets. Accounts payable, short-term loans are current liabilities.

Accounting concepts and principles are the fundamental guidelines for preparing financial statements.

• Accounting concepts are basic assumptions, rules, and guidelines that underlie the preparation of financial statements.

• Accounting principles are specific rules and standards that companies should follow when preparing their financial statements.

• Examples of accounting concepts include going concern, consistency, and materiality.

• Examples of accounting principles include the reve...read more

Balance sheet is a financial statement that shows a company's assets, liabilities, and shareholders' equity at a specific point in time.

• It provides a snapshot of a company's financial position.

• Assets are what the company owns, liabilities are what it owes, and shareholders' equity is the difference between the two.

• The balance sheet equation is: Assets = Liabilities + Shareholders' Equity.

• It helps investors and analysts assess the financial health and stability of a company.

• Ex...read more

Merger and acquisition is the process of combining two companies into one entity through various financial transactions.

• Merger involves two companies coming together to form a new company

• Acquisition involves one company buying another company

• Mergers and acquisitions can help companies expand their market share, diversify their products, or achieve cost savings through synergies

• Examples include Disney's acquisition of 21st Century Fox and the merger of Exxon and Mobil to form ...read more

A derivative is a financial instrument whose value is derived from an underlying asset or group of assets.

• Derivatives can be used for hedging, speculation, or arbitrage.

• Common types of derivatives include options, futures, forwards, and swaps.

• For example, a stock option derives its value from the underlying stock.

• Derivatives allow investors to take on leverage and potentially increase returns.

Bonds and stocks are two different types of investments with varying levels of risk and return potential.

• Bonds are considered safer investments compared to stocks as they offer fixed interest payments and return of principal at maturity.

• Stocks, on the other hand, represent ownership in a company and offer potential for higher returns but also come with higher risk.

• Investors often choose a mix of bonds and stocks in their portfolio to balance risk and return based on their fin...read more

Answers to various questions related to finance and accounting.

• Financial statements include balance sheet, income statement, and cash flow statement.

• Shares represent ownership in a company, while debentures are a form of debt.

• Cash flow statement helps in analyzing the cash inflows and outflows of a company.

• Non-performing assets are loans or advances that are not generating income for the bank.

• Derivatives are financial instruments whose value is derived from an underlying asse...read more

Design a database schema for a supermarket with discounts and offers. Solve a puzzle to fill numbers in a blank grid.

• Create tables for customers, products, discounts, and offers

• Use foreign keys to link tables

• Include columns for discount type, amount, and validity period

• Use a trigger to update discounts and offers based on customer purchase history

• Puzzle solution: 9 8 7 6 5 4 3 2 1 0

Find pairs of numbers in array whose sum is least near to k

• Sort the array in ascending order

• Use two pointers approach to find the pair closest to k

• Keep track of the minimum difference between k and the sum of pairs

• Return all pairs with the minimum difference

Given a matrix of characters and a string, find the first index of string in matrix. String can be horizontally, vertically, diagonally present in any direction.

• Iterate through each character in the matrix and check if it matches the first character of the string.

• If it matches, check if the remaining characters of the string are present in the same direction.

• Repeat the above step for all possible directions.

• Return the index of the first character of the string if found, else ...read more

Find the common element in all rows of a matrix.

• Iterate through each element of the first row and check if it exists in all other rows.

• If an element is found in all rows, return it.

• If no common element is found, return null or a message indicating the same.

The 5 financial statements are income statement, balance sheet, cash flow statement, shareholders' equity statement, and currency translation and exchange.

• Income statement shows a company's revenues and expenses over a period of time.

• Balance sheet provides a snapshot of a company's financial position at a specific point in time.

• Cash flow statement shows how cash is generated and used by a company.

• Shareholders' equity statement shows the changes in equity of shareholders over ...read more

To find intersecting point of two linked lists, use two pointers and traverse both lists simultaneously.

• Use two pointers, one for each linked list, and traverse both lists simultaneously

• If one pointer reaches the end of a list, redirect it to the head of the other list

• When both pointers point to the same node, that is the intersecting point

Find median of two sorted arrays in O(logM + logN) time complexity.

• Use binary search to find the partition point in both arrays.

• Calculate the left and right elements of the partition in both arrays.

• If the left elements are smaller than the right elements, we have found the median.

• If not, adjust the partition point accordingly and repeat the process.

• If the total number of elements is odd, median is the max of left elements.

• If the total number of elements is even, median is the...read more

Share capital is shown on the liability side of the Balance Sheet because it represents the funds raised from shareholders, which are owed back to them.

• Share capital represents the amount of money that shareholders have invested in the company.

• It is considered a liability because the company has an obligation to repay this amount to shareholders if the company is liquidated.

• Share capital is typically shown under the 'Shareholders' Equity' section of the Balance Sheet.

• It is im...read more

RSI is calculated based on the average gain and loss over a specified period of time.

• RSI is calculated using the formula: RSI = 100 - (100 / (1 + RS)), where RS = Average Gain / Average Loss

• Typically, RSI is calculated over a 14-day period, but this can be adjusted based on the trader's preference

• RSI values range from 0 to 100, with readings above 70 indicating overbought conditions and readings below 30 indicating oversold conditions

Public companies are listed on stock exchanges and have shares available for public trading, while private companies are not listed and have limited shareholders.

• Public companies have shares that are traded on stock exchanges, allowing for public ownership and trading.

• Private companies are not listed on stock exchanges and have limited shareholders, often including founders, employees, and private investors.

• Public companies are required to disclose financial information to th...read more

I have a strong knowledge of financial reports including income statements, balance sheets, and cash flow statements.

• Proficient in analyzing income statements to assess a company's revenue and expenses

• Skilled in interpreting balance sheets to understand a company's assets, liabilities, and equity

• Experienced in evaluating cash flow statements to determine a company's liquidity and financial health

Zig-zag traversal of binary tree is a traversal technique where nodes are visited in a zig-zag pattern.

• Start from the root node and traverse the first level from left to right.

• For the second level, traverse from right to left.

• Continue this pattern for all levels of the tree.

• Use a stack or queue to keep track of the nodes to be visited.

• Example: For a binary tree with root node 1, the zig-zag traversal would be 1 3 2 4 5 6 7.

PEG Ratio is a valuation metric that takes into account a company's growth rate in addition to its P/E ratio.

• PEG Ratio is calculated by dividing the P/E ratio by the annual earnings growth rate.

• A PEG Ratio of 1 is considered fair value, below 1 may indicate undervaluation, and above 1 may indicate overvaluation.

• It helps investors assess whether a stock is overvalued or undervalued based on its growth prospects.

• For example, if a company has a P/E ratio of 20 and an annual earn...read more

P/E Ratio is a financial metric used to evaluate a company's stock price relative to its earnings per share.

• P/E Ratio stands for Price-to-Earnings Ratio.

• It is calculated by dividing the current market price of a stock by its earnings per share (EPS).

• A high P/E Ratio may indicate that a stock is overvalued, while a low P/E Ratio may suggest undervaluation.

• Investors use P/E Ratio to assess the attractiveness of a stock's valuation.

• For example, if a company's stock is trading at...read more

The P/E ratio, or price-to-earnings ratio, is a financial metric used to assess the valuation of a company's stock.

• P/E ratio compares a company's stock price to its earnings per share (EPS).

• It indicates how much investors are willing to pay for each dollar of earnings.

• A higher P/E ratio suggests higher expectations for future earnings growth.

• A lower P/E ratio may indicate undervaluation or lower growth prospects.

• P/E ratio is commonly used to compare companies within the same ...read more

Green bonds are fixed-income securities designed to fund projects that have positive environmental or climate benefits.

• Green bonds are issued by governments, municipalities, or corporations to finance projects such as renewable energy, energy efficiency, clean transportation, and sustainable water management.

• Investors who purchase green bonds are supporting environmentally friendly initiatives while earning a return on their investment.

• The green bond market has been growing r...read more