Chief Financial Officers (CFOs) are an integral part of the financial activity and oversight of the organization. These professionals analyze financial data to identify profitable businesses, contribute to growth and achieve business goals. Preparing for a CFO interview can be exciting, and planning your answers with anticipation will give you a better chance of success. In this article, we cover the CFO interview questions you may encounter during the interview, along with some sample answers to help you prepare.
General Interview Questions
Interviewers usually start by asking you general questions to get to know you, such as:
- What were most of your duties in your prior role?
- How did this experience prepare you for a position at our company?
- Do you have prior knowledge of our company?
- What do you know about our company’s financial initiatives, success and goals?
- How do you feel you are capable of taking on the responsibilities that this role requires?
- What unique strengths will you bring to this company?
- What are your achievements over the past few years?
- How have you developed your leadership skills throughout your career?
- Why are you looking for a new job opportunity?
- If you weren’t a CFO, what do you think you would be doing for a living?
- Do you have any questions about the job or our company?
Background and Experience Questions
The interviewer will also likely want to evaluate your past work performance, the contributions you have made, as well as your work ethic, financial knowledge, and ability to manage and lead a team or department. Here are some example questions:
- How long have you worked in a financial leadership position?
- Do you have previous experience as a CFO?
- Describe your education and training.
- Describe your leadership style.
- How has your leadership approach helped your team succeed?
- What is your approach to implementing new strategies with your team?
- What experience do you have in managing investment activities?
- How do you manage your current company’s annual budget?
- What knowledge do you have with risk management?
- What was your most significant impact to your previous company?
- How did you promote ethical behavior in your team in your last role?
- What have you done in the past to support a company like ours progress and/or raise?
- Given what you find about this company, where do you consider you could add significance?
- Have you ever been distressed with your company’s stakeholders? How did you solve the problem?
Detailed questions will focus on your financial and accounting skills, experience and your ability to exercise a high degree of responsibility within the company. In addition, the interviewer will most likely be looking for your hard skills as well as your soft skills, such as your strategic planning, analytical thinking, and decision-making skills. Here are some questions they may ask you:
- What are your investment strategies for funding company departments during the annual budget cycle?
- Can you tell me about a time when you initiated an organizational change, such as restructuring a department? How did you approach it?
- How do you determine whether an organization should invest?
- How do you apply financial strategies to solve business problems?
- If you noticed that the annual forecast predicts a decrease in revenue, how would you solve this problem?
- What kinds of financial and accounting tools do you use in your work?
- What resources will you need from the company to effectively meet the goals?
- How do you measure ROI when investing?
- What is entity risk and why is it important in relation to financial activities?
- Why do deferred tax liabilities arise in mergers and acquisitions?
CFO Interview Questions and Answers
The following CFO interview questions and sample answers can help you prepare for your interview:
What are the toughest decisions for a CFO?
CFOs take on a great deal of responsibility, and many of these responsibilities involve making difficult decisions. Your answer should highlight your ability to analyze the factors influencing your company’s success and implement strategies that reduce risk to the business while achieving results.
Example: “In my first financial management role, I found that making decisions about process changes was the most challenging for me. This is mainly because the level of detail meant that I was reaching out to some of our stakeholders around the world, almost risking our deadlines. In addition changing business processes across the organization involved all departments, which was another challenging aspect. Part of the challenge was bringing everyone together to make sure we all understood the new initiatives, but we did it.”
How do you approach strategic workforce planning?
The interviewer will be looking for your ability to work collaboratively with your team and colleagues, apply analytical thinking and find ways to achieve business goals. Your answer should include examples from your experience where you implemented strategies that led to a favorable outcome.
Example: “I first consider the company’s overall goals. Then I analyze the current environment, such as current talent, skills, and other factors, before identifying where there may be gaps. In one case during my initial development process, I noticed that the sales team needed to improve communication and sales techniques. This gap led me to create a sales training series where our sales team participated in professional development. The result was higher customer engagement, which increased our overall sales, directly benefited the company and reduced marketing costs.”
What financial initiatives have you implemented and how successful have they been?
This type of question allows the interviewer to understand how motivated you are to help the entire organization achieve its business goals. Demonstrate your ability to strategically plan and achieve goals that lead to financial gains with examples from your previous work.
Example: “One initiative I implemented at my previous company was an investment strategy in high-yield preferred stocks. As a result, the company achieved an ROI of 12% in its first two years, which led to much of the company’s growth. Because this investment initiative was so successful, I initiated other investment strategies that helped the organization’s profitability.”
How would you determine the financial value of our company?
The interviewer wants to know what financial tools you would use to get a quick overview of the company’s value. Demonstrate your knowledge of basic financial principles by describing your process for evaluating a company’s financial value.
Example: “I would do a quick evaluation of your company’s financial situation using EBITDA, which is the company’s earnings before interest, taxes, depreciation and amortization. This is a nice and quick metric to get an idea of the net income your company is generating. EBITDA is also effective for quickly addressing the financial value of a company with its shareholders.”
Walk me through the discounted cash flow (DCF) process.
This is another accounting and financial principle that you should know and understand as a CFO. The interviewer will review your DCF compliance experience to determine a more accurate picture of the company’s value. Use your answer to describe the process and how you used the process to manage financial activities in your last organization.
Example: “My first step in creating a DCF model is to create a five-year financial forecast of the company’s balance sheet, income statement, and equity statement. All of this is based on my business assumptions of your company’s performance. After creating the forecast, I would calculate the bottom line values through a sustained rate growth or output multiple. This allows me to discount the forecast time period and terminal values back to present values along with the discount rate, resulting in a total financial value for the company.”
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