Gallagher & Mohan Junior Financial Analyst Interview Questions, Process, and Tips

Round 1 involves a real estate case study, while Round 2 consists of an online Excel test that focuses on functions such as SUMIF, COUNTIF, and other formulas.

Q1. What is the capitalization rate (cap rate) in real estate?
Ans. 
The capitalization rate (cap rate) in real estate is a measure used to estimate the potential return on investment for a property.
• The cap rate is calculated by dividing the property's net operating income (NOI) by its current market value or acquisition cost.

• It is expressed as a percentage and is used by investors to compare different investment opportunities.

• A higher cap rate indicates a higher potential return, but m...read more
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Q2. What is the unlevered IRR and levered IRR?
Ans. 
Unlevered IRR is the internal rate of return without considering debt, while levered IRR includes the impact of debt financing.
• Unlevered IRR is the return on an investment without taking into account the effects of financing, such as loans or debt.

• Levered IRR, on the other hand, considers the impact of debt on the investment's return.

• Unlevered IRR is useful for comparing investments on an equal footing, while levered I...read more
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Q3. Which cap rate would you choose between a higher cap rate and a lower cap rate, and what is your rationale for that choice?
Ans. 
I would choose a higher cap rate for potentially higher returns.
• Higher cap rate typically indicates higher potential returns on investment.

• Investors may choose a higher cap rate for riskier investments or properties with higher growth potential.

• Lower cap rate may be chosen for more stable and lower risk investments.

• Consider the market conditions, property type, and investment goals when deciding on cap rate.
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Q4. Where do you see yourself in the next five years?
Ans. 
In the next five years, I see myself advancing in my career as a financial analyst, taking on more responsibilities and potentially moving into a senior analyst role.
• Continuing to develop my analytical skills and financial knowledge through on-the-job experience and further education

• Seeking opportunities for growth and advancement within the company or potentially exploring new opportunities in the finance industry

• Buil...read more
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Q5. What is the internal rate of return (IRR)?
Ans. 
IRR is the discount rate that makes the net present value of all cash flows from a particular investment equal to zero.
• IRR is used to evaluate the attractiveness of an investment or project.

• It represents the annualized rate of return of an investment.

• IRR is calculated by setting the net present value of cash flows equal to zero and solving for the discount rate.

• If the IRR is greater than the cost of capital, the invest...read more
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Q6. What is the debt service coverage ratio?
Ans. 
The debt service coverage ratio is a financial metric used to measure a company's ability to cover its debt obligations.
• Calculates the ratio of a company's operating income to its debt payments

• A ratio above 1 indicates the company is generating enough income to cover its debt payments

• Used by lenders to assess the risk of lending to a company
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Q7. One excel test with panel in sheet they provided data with the help given functions countif, sumif, hlookup, vlookup we need to calculate that
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