Updated: 5/7/2024

Recruiting and hiring the right person is always a challenge, and financial planning and analysis (FP&A) is no exception. Case interviews can be a useful tool to evaluate candidates’ aptitude and approach to situations that they may face.

In a case interview, the interviewer asks the applicant to work through a challenging situation or problem, and then evaluates the response. The focus is not on a “right” or “wrong” answer, but rather the applicant’s approach to resolving the case. Below are several types of case studies, sample case questions, and some ways that applicants may frame their answers to show their business savvy.

The Business Case

FP&A has a critical role in supporting business decisions based on strategic fit and financial appropriateness. Below are three very different questions, but they each ask the applicant to think through a holistic way of building a business case to make a persuasive argument.

• An ice cream maker that sells its products in supermarkets is considering opening a chain of proprietary stores. Build the elements of a business case and determine whether this is a good idea.
• Eastern Newspapers is a large newspaper chain that is considering diversifying into non-newspaper media assets and is a potential client for our firm's M&A group. How would you go about advising this client? What information would you want to gather before you meet with them?
• Pick a stock that you follow and convince me why I should buy it.

The applicant should think through the following:

• Market/industry analysis: The size and growth trend of the market, the customer profile and distribution channels.
• Competitor analysis: Relative strengths, the potential competitor reaction and the potential for new entrants and disruption.
• Strategic alignment: The company SWOT (strengths, weaknesses, opportunities and threats), alignment with current or future capabilities, market position, available capital, risk appetite, experience, and regulatory impact.
• Financial analysis: The potential cash flow and income, payback, NPV, understanding of capex vs. expense, revenue recognition, impact on enterprise value, funding alternatives (debt, equity, working capital).
• General: Are they using a framework (i.e., Porter’s five forces), progressing through an operational work flow, trying to quantify and build a model and recognizing assumption and key drivers?

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The Quantitative Estimate

FP&A is a quantitative, analytical role where information is not always available; we need to be comfortable with ambiguity as we structure our models and approach.

• How many golf balls can fit in a 747 airplane?
• Using Excel, create a cost/benefit analysis showing the cost of lighting a room with a 60 watt LED versus a 60 watt CFL lightbulb. Assume the LED costs $7, lasts 25,000 hours, and uses 7 watts per hour, while the CFL costs $3, lasts 8,000 hours, and uses 14 watts per hour. The cost per kilowatt hour is $0.50, and the bulb is used 12 hours per day in winter, 10 hours per day in summer. Present your conclusion in PowerPoint.

Does the applicant have a logical approach to developing an answer? Most likely, he or she does not know the volume of a jetliner, but are they making reasonable assumptions? Do they highlight assumptions, discuss where to get data, and arrive at a conclusion that follows from the thought process? If Excel modeling is required, create a case where they need to demonstrate modeling skills using good Excel habits—one in which a coworker can look at a model and understand it’s structure quickly.

Social EQ or Situational Cases

FP&A is an interactive role, and requires the building of strong partnerships and often persuasion. These questions are designed to ask how the applicant might respond to a challenging personal situation.

• You have worked hard on your business cases, received appropriate buy-in, and submitted it to senior management, but the models are routinely ignored in favor of gut instinct. What should you do?

How does the applicant work through the social dynamics and impacts on long-term relationships, applying the heavy hand of senior staff, and displaying a general sensitivity to social issues? Also, does the applicant consider process solutions in addition to people solutions?

A Better Comparison

There is another benefit of using case interviews; often, interviewers may not even be aware of their own personal biases. We typically compare applicants against our own experiences, backgrounds, educations. Using the same case study for applicants, and even setting a baseline against existing employees, can provide a more tangible comparison for the evaluation than subjective questions such as, “Walk me through your resume and tell me why you made the decisions that you did.” The goal is to hire the right person, and case studies can provide another tool for you to use.

For more tips on how to find the right people for your FP&A staff, be sure to download the AFP FP&A Guide: Get Your Talent Right.