20+ Oxane Partners Interview Questions and Answers

Financial analyst interview questions covering DCF model, valuation methods, bond yield, creditworthiness, and credit quality.

• Three statement financial model includes income statement, balance sheet, and cash flow statement.

• Discount rate is calculated using the weighted average cost of capital (WACC) or cost of equity.

• DCF model involves projecting future cash flows and discounting them back to present value.

• Other valuation methods include comparable company analysis (CCA) and...read more

Light both ropes at the same time, when the first rope burns out, light the other end of the second rope.

• Light both ropes at the same time

• When the first rope burns out, light the other end of the second rope

• The 45 seconds mark is when the second rope burns out completely

The terminal growth rate is arrived at by considering the long-term growth prospects of the company.

• Consider the industry growth rate and the company's historical growth rate

• Analyze the company's competitive position and market share

• Evaluate the company's future investment plans and potential for expansion

• Take into account any regulatory or economic factors that may impact growth

• Use a range of values to account for uncertainty and sensitivity analysis

Loan servicing refers to the management of loans after they have been issued.

• It involves collecting payments from borrowers, managing escrow accounts, and handling delinquencies and defaults.

• Loan servicing can be done by the lender or a third-party servicer.

• Servicers may also provide customer service and support to borrowers.

• Examples of loan types that require servicing include mortgages, student loans, and auto loans.

Securitization is the process of converting illiquid assets into marketable securities.

• Securitization involves pooling together assets such as mortgages, auto loans, or credit card debt.

• These assets are then sold to a special purpose vehicle (SPV) which issues securities backed by the cash flows from the assets.

• Investors can then buy these securities, which offer a return based on the cash flows from the underlying assets.

• Securitization can help to increase liquidity in the m...read more

Indirect and Offset are functions in Excel used to reference cells or ranges indirectly.

• Indirect function is used to reference a cell or range using a text string that contains the cell or range address.

• Offset function is used to reference a cell or range that is a specified number of rows and columns away from a given cell or range.

• Both functions are useful for creating dynamic formulas that can be updated easily.

• Example: =INDIRECT("A1") will reference the cell A1, while =OF...read more

SWOT analysis and ability to gel up with the organization are crucial for success in the role of Senior Analyst.

• I have experience in conducting SWOT analysis and have used it to identify areas of improvement and growth opportunities for the organization.

• I am a team player and have the ability to work collaboratively with colleagues from different departments and levels of seniority.

• I am adaptable and can quickly adjust to changes in the organization's goals and priorities.

• I h...read more

Financial ratios are tools used to evaluate a company's financial performance and health.

• Financial ratios are calculated using data from a company's financial statements.

• They help investors and analysts assess a company's profitability, liquidity, efficiency, and solvency.

• A good number for a financial ratio can vary depending on the industry and company size.

• For example, a current ratio of 2 or higher is generally considered good, indicating a company has enough current asset...read more

Excel functions like Vlookup, Hlookup, Xlookup, IF/AND/OR are used for data lookup and logical operations.

• Vlookup: Searches for a value in the first column of a table and returns a value in the same row from a specified column.

• Hlookup: Similar to Vlookup but searches for a value in the first row of a table.

• Xlookup: A more versatile version of Vlookup and Hlookup that can search both vertically and horizontally.

• IF: Returns one value if a condition is true and another value if ...read more

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

• Used in Excel to search for a value in a table

• Returns a corresponding value from a specified column

• Syntax: =VLOOKUP(lookup_value, table_array, col_index_num, [range_lookup])

• Example: =VLOOKUP(A2, B2:D10, 3, FALSE) - searches for value in A2 in the table B2:D10 and returns value from the 3rd column

Securitisation is the process of pooling various types of debt and selling them as securities to investors.

• Securitisation involves bundling together various types of debt, such as mortgages, auto loans, or credit card debt.

• These debts are then sold to a special purpose vehicle (SPV) which issues securities backed by the cash flows from the underlying assets.

• Investors purchase these securities and receive payments based on the performance of the underlying assets.

• Securitisatio...read more

A 10% decrease in depreciation would result in higher net income and retained earnings on the financial statements.

• Net income would increase as depreciation expense is lower, leading to higher profits.

• Retained earnings would also increase as net income contributes to this account.

• The company's assets would appear higher on the balance sheet due to lower accumulated depreciation.

• Investors may view the company more favorably with higher net income and retained earnings.

Securitization is the process of pooling various types of debt and selling them as securities to investors.

• Securitization involves bundling together various types of debt, such as mortgages, auto loans, or credit card debt.

• These debts are then sold to investors in the form of securities, such as bonds or asset-backed securities.

• Investors receive payments based on the underlying debt, while the issuer of the securities receives funding upfront.

• Securitization helps to transfer ...read more

EBIT is earnings before interest and taxes, while EBITDA is earnings before interest, taxes, depreciation, and amortization.

• EBIT excludes depreciation and amortization expenses, while EBITDA includes them.

• EBITDA provides a clearer picture of a company's operating performance by removing the impact of non-operating expenses.

• EBIT is commonly used to analyze profitability, while EBITDA is often used to assess a company's cash flow potential.

• Both EBIT and EBITDA are important met...read more

Arbitrage is the practice of taking advantage of price differences in different markets.

• Arbitrage involves buying an asset in one market and selling it in another market where the price is higher.

• LTV (Loan-to-Value) ratio is the ratio of a loan to the value of the asset being purchased.

• ICR (Interest Coverage Ratio) is the ratio of a company's earnings before interest and taxes to its interest expenses.

• LTV ratio is used in real estate financing while ICR ratio is used in corpo...read more

The current risk-free rate in India is around 6.25%.

• The risk-free rate in India is typically determined by the yield on government bonds, such as the 10-year government bond.

• As of now, the 10-year government bond yield in India is around 6.25%.

• The risk-free rate is used as a benchmark for evaluating the return on investment in asset management.

Structured finance is a complex financial instrument that pools various financial assets and creates securities backed by those assets.

• Involves pooling various financial assets like loans, mortgages, or receivables

• Creates securities backed by these assets, which are then sold to investors

• Often involves special purpose vehicles (SPVs) to isolate risk and protect investors

• Examples include collateralized debt obligations (CDOs), mortgage-backed securities (MBS), and asset-backed...read more

Solvency ratio measures a company's ability to meet its long-term debt obligations.

• Solvency ratio is calculated by dividing a company's net income by its total liabilities.

• A higher solvency ratio indicates a company is more financially stable and able to meet its debt obligations.

• For example, a solvency ratio of 0.5 means a company's net income is only half of its total liabilities.

Asset backed lending is a type of loan where the borrower uses an asset as collateral to secure the loan.

• In asset backed lending, the borrower pledges an asset (such as real estate, equipment, or inventory) as collateral for the loan.

• If the borrower defaults on the loan, the lender can seize the asset to recoup their losses.

• Asset backed lending is commonly used in industries such as real estate, automotive, and manufacturing.

• It allows borrowers to access financing by leveragi...read more

Structured finance involves creating complex financial instruments by pooling various financial assets together.

• Involves pooling various financial assets together

• Creates complex financial instruments

• Used to manage risk and create customized investments