Financial Analyst Interview Questions (UK, 2026): 25 Technical and Behavioural Questions With Model Answers

Financial analyst interviews in the UK usually mix technical questions with behavioural ones. Below are 25 questions in five groups of five: technical accounting, modelling concepts, valuation basics, behavioural and commercial. Each comes with what it tests and a short model answer outline. Learn the outlines, not the wording, and back every behavioural answer with something that actually happened.

Key takeaways

• Expect a mix of technical accounting, modelling, valuation, behavioural and commercial questions.
• Net income links the income statement to retained earnings and to operating cash flow.
• The NPV rule is to invest if NPV is positive; IRR is the discount rate that makes NPV zero.
• In the UK, accounting depreciation isn't deductible for tax; capital allowances may be given instead.
• Back every behavioural answer with a real, confirmed line from your CV.

The 25 questions at a glance

Technical accounting questions (1–5)

1. Walk me through the three financial statements and how they link

Tests: whether you understand accounting as a system, not three separate reports.

Answer outline: Net income from the income statement feeds retained earnings on the balance sheet and is the starting point for cash from operations. Corporate Finance Institute adds that depreciation is added back to net income in operating cash flow, capital expenditure adds to PP&E and runs through investing cash flow, and the period's cash movements plus opening cash give "the current period closing cash balance on the balance sheet."

2. If depreciation increases by £10, what happens to the three statements?

Tests: whether you can trace one change through everything.

Answer outline: The textbook version assumes depreciation is tax-deductible. Say you'll use the UK main rate of 25% corporation tax. Operating profit falls £10, tax falls £2.50, net income falls £7.50. On the cash flow statement, net income is down £7.50 but you add back the £10 non-cash charge, so cash rises £2.50. On the balance sheet, PP&E falls £10 and cash rises £2.50 (assets down £7.50), and retained earnings fall £7.50. It balances.

Then add the UK point that impresses interviewers: HMRC says depreciation "is not allowed as a deduction in computing taxable profits". Capital allowances may be given instead. So in a real UK tax computation, the tax line wouldn't move with depreciation.

3. What's the difference between an accrual and a prepayment?

Tests: the accruals basis.

Answer outline: An accrual is a cost for the period that hasn't been paid yet. A prepayment is a cost paid in advance for a later period. ACCA's guidance on adjustments says unpaid balances relating to the period go in the statement of financial position "as current liabilities", and amounts prepaid go in "as a current asset".

4. A customer pays £12,000 upfront for a 12-month subscription. How do you account for it?

Tests: revenue recognition.

Answer outline: Hypothetical figures. Cash arrives on day one, but revenue follows delivery. Under IFRS 15, an entity recognises revenue "to depict the transfer of promised goods or services to the customer". So you'd recognise about £1,000 a month as the service is provided, holding the unearned balance as deferred income, a liability.

5. What is working capital and why does it matter?

Tests: liquidity and cash awareness.

Answer outline: Corporate Finance Institute defines it as "the difference between a company's current assets and current liabilities." Then explain why it matters: a growing business can be profitable and still short of cash if receivables and stock grow faster than payables.

Modelling and Excel concept questions (6–10)

These test how you think about models, not formula recall.

6. How do you structure a financial model?

Tests: clarity and control.

Answer outline: Inputs separated from calculations and outputs, assumptions in one place and labelled, consistent formulas across rows, and check cells (for example, does the balance sheet balance?).

7. How would you check a model you've inherited?

Tests: professional scepticism.

Answer outline: Start with the outputs and check they reconcile to source data (ledger, budget, last actuals). Look for hard-coded numbers in formula rows, broken links and inconsistent formulas. Ask what it's used for before changing anything.

8. How would you forecast revenue for next year?

Tests: driver-based thinking.

Answer outline: Break revenue into drivers the business can measure, such as volume × price, customers × average spend, or headcount × utilisation × rate. Base each driver on history, then adjust for known changes like price rises or new contracts.

9. How would you build a sensitivity or scenario analysis?

Tests: handling uncertainty.

Answer outline: Identify the few assumptions that move the answer most, flex them one at a time (sensitivity) or together into coherent cases (scenarios), and show the effect on the outputs the decision depends on.

10. What's a circular reference, and is it ever deliberate?

Tests: model mechanics.

Answer outline: A formula that depends, directly or indirectly, on its own result. Most are errors. A common deliberate one is interest calculated on average cash, where interest affects cash and cash affects interest. If you use one, make it switchable and documented.

Valuation basics (11–15)

11. What is NPV, and when would you accept a project?

Tests: time value of money.

Answer outline: NPV discounts a project's cash inflows and outflows at the cost of capital. ACCA's student article on DCF states the rule: "invest if NPV > 0". It also stresses it's "the timing of the cash (not the profit)" that matters, so you add back depreciation.

12. What is IRR?

Tests: return measures.

Answer outline: Corporate Finance Institute defines it as "the discount rate that makes the net present value (NPV) of a project zero." Compare it with the cost of capital. Mention that NPV gives an absolute amount, IRR a rate.

13. Walk me through a DCF

Tests: valuation method.

Answer outline: A DCF values an investment "by discounting the estimated future cash flows" (Corporate Finance Institute). Forecast free cash flow for a set period, calculate a terminal value using either an exit multiple or a perpetual growth rate, discount both at an appropriate rate, and sum them. Contrast it with comparable company analysis, which uses "ratios of similar public companies" such as EV/EBITDA.

14. What is WACC?

Tests: discount rates.

Answer outline: The weighted average cost of capital is a firm's "blended cost of capital across all sources", per Corporate Finance Institute. Each source is weighted by its share of total capital. The cost of debt is multiplied by (1 – tax rate) because interest is tax-deductible.

15. What's the difference between enterprise value and equity value?

Tests: capital structure.

Answer outline: Enterprise value is the value of the business's assets excluding cash. Equity value is what remains for shareholders after debts are paid. Corporate Finance Institute gives the bridge: equity value = enterprise value – total debt + cash.

Behavioural questions (16–20)

Use STAR: situation, task, action, result. Our guide to STAR interview examples for finance has full model answers. Every story should trace back to a line on your CV.

16. Tell me about a time you made a mistake

Tests: ownership and learning. Outline: a real, moderate error; you told the right person; you fixed the cause; the check you now run.

17. Explain a complex number to someone without a finance background

Tests: communication. Outline: a real variance or forecast you explained, what you left out, and the decision it helped the budget holder make.

18. Tell me about juggling competing deadlines

Tests: prioritisation. Outline: how you ranked the work (deadline, impact, who was waiting), what you said to the people whose work slipped, and the result.

19. Describe a time you found an error in data

Tests: attention to detail. Outline: what looked wrong, how you traced it to source, who you told, and the control added afterwards.

20. Why financial analysis, and why this company?

Tests: motivation and research. Outline: one honest reason you like the work, backed by something you've done, then two specifics about the company from its own website or results. The National Careers Service recommends you "do some research on the company's website".

Commercial questions (21–25)

21. What does EBITDA tell you, and what does it miss?

Tests: judgement about metrics. Outline: it shows operating profitability before financing and non-cash items, but Corporate Finance Institute notes it's "a non-IFRS/non-GAAP calculation" and "Ignores Capital Expenditures". Asset-heavy businesses can look strong on EBITDA while needing heavy reinvestment.

22. Pick a company you follow. How does it make money?

Tests: business understanding. Outline: revenue streams, main costs, what drives margin, and one risk.

23. How would higher interest rates affect a business like ours?

Tests: joined-up thinking. Outline: higher borrowing costs, a higher discount rate in valuations, possible pressure on customer demand, and better returns on cash held. Tie it to their balance sheet if it's public.

24. Which KPIs would you track for this business?

Tests: relevance. Outline: three or four measures tied to how the business earns money, such as gross margin, cash conversion or customer retention, and why each matters to a decision.

25. What questions do you have for us?

Tests: preparation. Outline: the National Careers Service suggests writing your questions down before the interview. Ask about the team's main reporting cycle, the systems used and what a good first six months looks like.

How to prepare in the week before

Practise technical answers until you can give them without notes, and draw behavioural answers from confirmed lines on your CV. Then mark which of the five groups the job description leans on. A role heavy on business partnering will weight questions 17 and 24. A transactions or valuation role will go deeper on 11 to 15. Our walkthrough on tailoring your CV to a job description uses the same approach.

Technical answers get you through the first half of the interview. Specific, true stories get you the offer. As a next step, paste the job description into the Coffee & Excel workspace to see which skills it asks for, then match each one to a question above and a line on your CV.

Frequently asked questions

Do UK financial analyst interviews include a modelling test?

Some do and some don't; it varies by employer and role. Check the invitation or ask the recruiter, and prepare the model-structure and checking questions either way.

How technical are graduate financial analyst interviews?

Expect the fundamentals: how the three statements link, accruals, working capital and NPV. Deeper valuation questions are more common in transactions and investment roles.

Should I use the US or UK tax treatment in the depreciation question?

Give the textbook answer, which assumes depreciation is tax-deductible, then mention that in the UK HMRC doesn't allow accounting depreciation as a deduction and capital allowances may be given instead.

How many behavioural stories should I prepare?

Prepare at least one true story for each behavioural question here (mistake, communication, deadlines, data error, motivation), each tied to a line on your CV.