Entry-Level Analyst Qualifications

I frequently receive questions asking how a candidate should prepare for an interview. It should be no surprise that different firms look for different skills or personal qualities depending on the type of work or company culture, but there is generally some significant overlap. To help answer subscriber emails I started providing a description of a process we ran internally at the firm I work for. What follows is a summarized version of this process.

Beyond raw intellectual horsepower and personality, generally what we are looking for is the candidate requiring the least amount of training. If you can contribute day one, you have a leg up on the competition.

In the first round interview we start by providing an overview of our firm, and letting the candidate ask any questions. Then we address the topics listed below.


This may come as a surprise, but many candidates do not know what they are interviewing for. In fact, this was a mistake I made in my first interview for an investment banking internship. I had prepared myself for technical questions, but we never got there because I could not adequately describe a day in the life of an analyst. 

In any process it will be difficult to move forward if you cannot articulate why you are passionate about the industry, and communicate that you understand and look forward to the responsbilities and workload (which can be substantial). 

Finance and Accounting:

I am not as interested in whether or not you understand debits and credits (conceptually yes, but nothing beyond what is outlined here). What I want to know is whether or not you can look at financial statements and understand them.

If a candidate cannot describe the financial statements, and list the line items you would expect on a typical income statement / balance sheet / cash flow statement from top to bottom, the interview is unlikely to go far. With that in mind, I generally approach this by asking the following series of questions:

  1. Can you walk me through a cash flow statement from top to bottom? If a candidate struggles here it’s unlikely that they will be invited back. If this is answered effortlessly I will ask the following:
  2. How are the financial statements linked? This is one of my favorite technical interview questions for entry-level candidates. I like that it is broad and permits the candidate respond with as much or as little detail as they believe is required. The last question I ask is as follows:
  3. Assume that your career objective is to identify and acquire one business, which you will then manage for the rest of your life. How do you value the company? What variables make you excited to move forward with the transaction?

The third question is revealing. I want to know if the candidate can comment on an industry of interest. How would they identify the opportunity? Does the candidate understand how value is created or destroyed? Are they focused on cash generation in their analysis (in particular as a company scales)? How does the candidate evaluate risk? What is your investment thesis?

(note: questions 1 & 2 can be answered with information from this series)

Financial Modeling:

At the analyst level it is not as important to me if you have built very complex models. What I want to know is that the first time you are required to build one, the key relationships are cemented. I will generally ask candidates to describe their financial modeling experience to date, and develop questions specific to their response.

(For example, one candidate mentioned building a more involved distribution waterfall as an intern. So we asked him to describe how it worked, and to explain what was difficult about the process.)

Before the second interview, we generally ask candidates to submit an example they are proud of, and then watch them work through a simple exercise. The two combined are generally sufficient. Examples of simple exercises might include using two years of income statement data and balance sheet data to create an integrated financial statement model or fixing a broken model. Watching them work through it exposes familiarity with Excel. I will also typically ask if they have ever worked with large amounts of data in Excel (which is a positive, but not a requirement).

Note: For any investment banking interview, thorough knowledge of a discounted cash flow model is generally a requirement. The financial modeling test will likely involve a simple three statement model and simple discounted cash flow model. In private equity it is more likely to be focused on a case-study and leveraged buyout model. 


I want to know that a candidate is comfortable explaining a concept or narrative in detail and at length. Question example:

  1. Tell me about the last book you read and really enjoyed.

For the second interview we provide an information memorandum detailing a business we have evaluated in the past to see how they would go about their own evaluation (this also reveals a lot about finance / accounting / valuation knowledge). The presentation is followed with Q&A.


I don’t like asking impossible questions, but I do want to know that candidates are numerate. The problem with these questions is they can make candidates nervous, which makes it easy to answer incorrectly. So I generally keep these simple, and include one that requires some thought and explanation to slow the interviewee down. Example:

  1. Asking the candidate to sum two fractions with different denominators.
  2. Question: Imagine a competition where all contestants submit a number between 0 and 100, and the objective is to pick the number closest to 80% of the average number submitted. What number do you choose and why?


We are looking for curious minds and self-motivated, entrepreneur-like candidates. So I want to know how a candidate spends his / her time outside of school or work. What are their hobbies, and how dedicated are they to developing themselves (continued learning, etc.).

No matter how seemingly unrelated, I believe hobbies pursued can contribute meaningfully to professional development. One of my favorite examples of this comes from an interview with Daniel Lubetzky, CEO of Kind Snacks:

  1. Were you an entrepreneur early on?
  2. I did magic shows, probably from the time I was 8 through 19. When I was a college student, I paid for my travels doing magic shows from the streets of Paris to the streets of Bulgaria.
  3. You’re the third C.E.O. I’ve interviewed who’s a former magician. What’s the correlation?
  4. First of all, magicians practice a lot. It requires a lot of discipline. Second, you can’t be afraid to be a leader, to go on stage, and you learn to have presence. You need to be able to visualize and connect and create. Most important, you learn to think outside the box.[1]
  5. Daniel Lubetzky of Kind Snacks, on Reaching Multiple Goals