Fresh Interview question
Hi All,
Just been discussing with a buddy who just came from a PE interview where he got the following question:
- Assume that depreciations will increase by 10, what effect will it have on P/L, BS and Cash flow statement? Choose your own numbers.
We are still discussing it, so would appreciate if some of you guys have the answer?
Thanks,
this is the #1 banking interview question, nvm PE.
the main assumption you need is taxes - do you have taxes and if so how much? yes taxes (40%) I/S +10 Depreciation -10 EBIT
-4 taxes (0.4 * 10)
-6 Net Income
C/F -6 Net Income
+10 D&A
+4 Cash
B/S +4 Cash -10 Net PP&E -6 Retained Earnings
No taxes: I/S +10 Depreciation
-10 EBIT
-10 Net Income
C/F -10 Net Income
+10 D&A
0 Cash
B/S -10 Net PP&E -10 Retained Earnings
Yea, Lociano... you better bone up on your interview questions. This is one of the most common questions you will get in any interview. Check out the WSO guides if you want to prep.
http://www.ibankingfaq.com/category/interviewing-technical-questions/ac…
Thanks guys!
Yeah I found out that it was one of the more basic banking questions.. But I have just started looking into IB and PE, so learning new stuff each day.
lociano, if ur recruiting this winter, make sure you do some hardcore studying ASAP
What guides would you recommend (should mostly be minded on PE)?
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