When answering this question, it's important to demonstrate your systematic approach to analyzing financial statements. Start by mentioning the key financial statements you review, such as the balance sheet, income statement, and cash flow statement. Explain the specific metrics and ratios you focus on, such as liquidity ratios, profitability ratios, and solvency ratios. Provide an example of how you have used financial analysis to make a recommendation or decision in the past. For instance, you might say:
"I start by reviewing the balance sheet to understand the company's assets, liabilities, and equity. I then analyze the income statement to assess profitability and the cash flow statement to evaluate liquidity. I pay close attention to key ratios like the current ratio, return on equity, and debt-to-equity ratio. For example, in my previous role, I identified a declining current ratio, which indicated potential liquidity issues. I recommended a strategy to improve cash flow, which was successfully implemented and resulted in a 15% increase in liquidity over the next quarter."
Stand out from the crowd with video applications! Make your video applications in minutes and show the real you.