How does _____ affect the three financial statements? : What can they throw at you?
I seem to get how does _________ affect the three financial statements in every interview. Wondering what common ones are? So far I've received depreciation, accounts receivable, accrued compensation, selling an asset worth 10 for 20.
Wondering if anyone else has other examples so that I can continue prepping? Or a good way to think about the answer? When I get tripped up it seems to be on the statement of cash flows.
The messiest one I've ever gotten (looks bad but really isn't):
Your company buys $480 worth of PP&E, half with cash, half with debt. Of the debt portion, 2/3 are senior notes with a 10% interest and 15% mandatory debt repayment. The other third is a PIK loan with 10% interest.
Another interesting one: Normally you pay an employee $100 per year. You decide to start paying the employee $120 in stock options only from now on. How would this affect the three financial statements?
Will edit later with answers, have to go.
easy one i usually see is depreciation or asset acquisitions.
One I got from Moelis was inventory markdown. Pretty simple as long as you've taken an accounting class basically.
it flows through everything the exact same as a D&A expense. Pretty easy if you've literally read a guide
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