10+ L Brands Interview Questions and Answers

Vlookup is a function in Excel used to search for a value in a table and return a corresponding value from another column.

• Vlookup stands for 'Vertical Lookup'.

• It is commonly used in Excel to search for a value in the leftmost column of a table and return a value in the same row from a specified column.

• If Vlookup is giving an error, the symbol '#' is used to remove the error.

• For example, if the formula '=VLOOKUP(A2, B2:C10, 2, FALSE)' is giving an error, you can use '#N/A' to ...read more

Balance sheet shows a company's assets, liabilities, and equity at a specific point in time. P&L shows a company's revenues, expenses, and profits over a period. Cash flow statement shows how cash flows in and out of a company.

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

• P&L (Profit and Loss) statement shows a company's revenues, expenses, and profits over a specific period, usually a year.

• Cash flow statement tracks the inflo...read more

EBIT is earnings before interest and taxes, EBITDA is earnings before interest, taxes, depreciation, and amortization, cash flow statements show the inflow and outflow of cash, financial ratios are used to analyze a company's financial performance.

• EBIT stands for Earnings Before Interest and Taxes, it is a measure of a company's profitability before taking into account interest and taxes.

• EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization, it pro...read more

The negative item in the balance sheet is liabilities.

• Liabilities represent the company's debts or obligations that must be paid off in the future.

• Examples of liabilities include loans, accounts payable, and accrued expenses.

• Having high levels of liabilities relative to assets can indicate financial risk.

The 3 financial statements (Income Statement, Balance Sheet, Cash Flow Statement) are interconnected and provide a comprehensive view of a company's financial performance.

• Income Statement shows the company's revenues and expenses, which directly impact the Net Income.

• Balance Sheet displays the company's assets, liabilities, and equity, with Net Income from the Income Statement affecting the Equity.

• Cash Flow Statement details the company's cash inflows and outflows, with Net I...read more

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a measure of a company's operating performance.

• EBITDA is calculated by adding back interest, taxes, depreciation, and amortization to net income.

• It is used to analyze and compare profitability between companies because it eliminates the effects of financing and accounting decisions.

• EBITDA is often used by investors and analysts to assess a company's ability to generate cash flow.

• For examp...read more

The candidate should listen attentively and ask relevant questions to understand the organization's policies.

• Listen attentively to the HR representative explaining the organization's policies.

• Ask relevant questions to clarify any doubts or uncertainties about the policies.

• Take notes to ensure accurate understanding and future reference.

• Seek clarification on any specific policies that may impact the role of a financial analyst.

• Demonstrate understanding and alignment with the o...read more

Appreciation refers to the increase in value of an asset over time.

• Appreciation can be seen in various assets such as real estate, stocks, and collectibles.

• It is the opposite of depreciation, which is a decrease in value.

• Factors such as market demand, economic conditions, and scarcity can contribute to appreciation.

• Appreciation can be realized through selling the asset at a higher price than its original purchase price.

Financial models are built by gathering historical financial data, making assumptions about future performance, and using various forecasting techniques.

• Gather historical financial data from income statements, balance sheets, and cash flow statements

• Make assumptions about future performance based on industry trends, company strategy, and economic conditions

• Use forecasting techniques such as discounted cash flow analysis, sensitivity analysis, and scenario analysis

• Build the mo...read more

WACC stands for Weighted Average Cost of Capital, a calculation used to determine a company's cost of capital.

• WACC takes into account the cost of debt and equity in a company's capital structure

• It is calculated by multiplying the cost of each capital component by its proportional weight and summing the results

• WACC is used as a discount rate in valuation models such as discounted cash flow analysis

• A company's WACC is used to evaluate potential investments and projects

FCF calculation refers to Free Cash Flow calculation, which measures a company's ability to generate cash after accounting for capital expenditures.

• FCF = Operating Cash Flow - Capital Expenditures

• It represents the cash that a company is able to generate after spending the money required to maintain or expand its asset base.

• It is a key metric used by investors and analysts to evaluate a company's financial health and performance.

• Example: Company A has an operating cash flow of...read more

Financial modelling is the process of creating a mathematical representation of a company's financial situation.

• It involves forecasting financial performance based on historical data and assumptions.

• Financial models are used for budgeting, valuation, and decision-making.

• Common types of financial models include discounted cash flow (DCF), merger and acquisition (M&A), and sensitivity analysis models.

Income statement format includes revenue, expenses, and net income.

• Start with revenue at the top

• List all expenses below revenue

• Calculate net income by subtracting total expenses from revenue

• Include headings for each section such as 'Revenue', 'Expenses', and 'Net Income'

• Format should be: Revenue - Expenses = Net Income

Depreciation is the allocation of the cost of a tangible asset over its useful life.

• Depreciation is a non-cash expense that reduces the value of an asset over time

• It reflects the wear and tear, obsolescence, or decrease in value of the asset

• Common methods of calculating depreciation include straight-line, double declining balance, and units of production

• Example: A company buys a machine for $10,000 with a useful life of 5 years. Using straight-line depreciation, the annual de...read more