Tristone Strategic Partners Financial Analyst Interview Questions and Answers

Need to prepare a financial model and a presentation

Q1. Present your financial presentation and model
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Q2. Explain EBITDA and how it is used as an alternative to net income.
Ans. 
EBITDA is a financial metric used to evaluate a company's operating performance by excluding non-operating expenses.
• EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization.

• It provides a clearer picture of a company's profitability from its core operations.

• EBITDA is used as an alternative to net income because it excludes non-operating expenses, which can vary widely between companies.

• Investors...read more
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Q3. Explain FCFF, FCFE, DCF and Enterprise Value and how it is calculated? Explain Growth and Maintenance Capex
Ans. 
FCFF, FCFE, DCF, and Enterprise Value are key financial metrics used in valuation. Growth and Maintenance Capex are important factors in calculating these metrics.
• FCFF (Free Cash Flow to Firm) is the cash flow available to all providers of capital, calculated as Operating Cash Flow - Capital Expenditures + Interest Expense * (1 - Tax Rate)

• FCFE (Free Cash Flow to Equity) is the cash flow available to equity investors, c...read more
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Q4. Different ways to value a company
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Different ways to value a company include discounted cash flow, comparable company analysis, precedent transactions, and asset-based valuation.
• Discounted cash flow (DCF) analysis estimates the value of a company based on its future cash flows.

• Comparable company analysis (CCA) compares the company to similar publicly traded companies to determine its value.

• Precedent transactions analysis looks at the prices paid for sim...read more
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Q1. What are your hobbies. Who all are in your family?
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Q2. What are the uses and sources of working capital. How is Enterprise Value calculated for private company.
Ans. 
Working capital is used for day-to-day operations and is sourced from current assets. Enterprise value for private companies is calculated using various methods.
• Uses of working capital include funding daily operations, managing inventory, and covering short-term liabilities.

• Sources of working capital include cash, accounts receivable, and short-term investments.

• Enterprise value for private companies can be calculated u...read more
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Make financial model and corporate presentation

Q1. How does depreciation affect all 3 statements
Ans. 
Depreciation affects all 3 financial statements by reducing net income, increasing expenses, and decreasing assets' value.
• Reduces net income on the income statement

• Increases expenses on the income statement

• Decreases the value of assets on the balance sheet

• Impacts cash flow from operations on the cash flow statement
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Q2. FCFF vs FCFE , what does it mean to take after tax EBIT / EBIT *(1-T) while FCFF calc
Ans. 
Taking after tax EBIT / EBIT *(1-T) in FCFF calculation adjusts for taxes and interest expenses.
• FCFF (Free Cash Flow to Firm) is calculated before interest and taxes, so adjusting for taxes with after tax EBIT / EBIT *(1-T) accounts for the tax shield provided by interest expenses.

• FCFE (Free Cash Flow to Equity) is calculated after interest and taxes, so no adjustment is needed for taxes in the calculation.

• By using aft...read more
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Q3. What is EBITDA and how does it affect the company
Ans. 
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, as it excludes non-operating expenses.

• EBITDA helps investors and analysts assess a company's ability to generate cash flo...read more
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Told to make a comprehensive financial model and presentation on a cerain company .

Q1. Techincal questions on Financial Statements.
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