JPMorgan Chase & Co. Investment Banking Analyst Interview Questions and Answers

Q1. Valuation related question: FCFE, FCFF, DCF, WACC
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You should know the basics of mathematics operations

Ij this we have given a company's Financial statements and check how something affects 3 statements.

Q1. How depreciation changes Income statement and cash flow statement
Ans. 
Depreciation reduces net income on the income statement but is added back on the cash flow statement as a non-cash expense.
• Depreciation is a non-cash expense that reduces the net income on the income statement.

• On the cash flow statement, depreciation is added back as it does not involve an actual outflow of cash.

• Depreciation affects the profitability of a company on the income statement but does not impact its cash pos...read more
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Q2. How inventory affects cash flow statement.
Ans. 
Inventory affects cash flow statement by impacting operating cash flow through changes in inventory levels.
• Inventory purchases reduce cash flow from operations as cash is used to acquire inventory.

• Inventory sales increase cash flow from operations as cash is received from selling inventory.

• Changes in inventory levels impact working capital and cash flow from operations.

• Inventory write-downs or write-offs can also affec...read more
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Q1. What was your thoughts process on valuation methodology
Ans. 
My thought process on valuation methodology involves analyzing financial statements, market trends, and industry comparables to determine the value of a company.
• I start by examining the company's financial statements to understand its revenue, expenses, and profitability.

• I then research market trends and industry comparables to see how the company stacks up against its competitors.

• Next, I consider different valuation m...read more
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