WALL STREET PREP 2026/2027 | COMPLETE STUDY GUIDE, PRACTICE QUESTIONS &
INTERVIEW PREPARATION
Assets - ANS ✔✔resources a company uses to operate its business
includes cash, A/R, PP&E
Liabilities - ANS ✔✔represents the company's contractual obligations and includes A/P, debt,
accrued expenses
Shareholder's equity - ANS ✔✔is the residual
the value of the business available to the owners (shareholders) after debts have been paid off
Income statement - ANS ✔✔illustrates the profitability of the company over a specified period
of time
broad sense: shows revenue-expenses
Balance sheet - ANS ✔✔snapshot of the company economic resources and funding for those
resources at a given point in time (A = L + SE)
Revenue - ANS ✔✔"top-line"
represents the sale of goods and services
it is recorded when earned (even though cash might not have been received at the time of
transaction)
, Expenses - ANS ✔✔netted against revenue to arrive at net income
COGS (directly associate with good production), SG&A (indirectly associated with production),
interest expense (expense related to paying debt holders periodic payments), taxes,
depreciation expense (non-cash expense accounting for the use of PP&E, often imbedded
within COGS and SG&A)
Net income - ANS ✔✔"bottom-line"
revenue-expenses
the profitability available to common shareholder's after debt payments have been made
(interest expense)
EPS (earnings per share) - ANS ✔✔portion of a company's profit allocated to each outstanding
share of common stock
EPS = (net income - dividends on preferred stock)/weighted average shares outstanding
Cash flow statement - ANS ✔✔While cash is not necessarily received when a sale occurs, the
income statement still records the sale. As a result, the income statement captures all the
economic transactions of the business.
The cash flow statement is needed because the income statement uses what is called accrual
accounting. In accrual accounting, revenues are recorded when earned regardless of when cash
is received (revenue includes sales using cash and made on credit A/R)
INTERVIEW PREPARATION
Assets - ANS ✔✔resources a company uses to operate its business
includes cash, A/R, PP&E
Liabilities - ANS ✔✔represents the company's contractual obligations and includes A/P, debt,
accrued expenses
Shareholder's equity - ANS ✔✔is the residual
the value of the business available to the owners (shareholders) after debts have been paid off
Income statement - ANS ✔✔illustrates the profitability of the company over a specified period
of time
broad sense: shows revenue-expenses
Balance sheet - ANS ✔✔snapshot of the company economic resources and funding for those
resources at a given point in time (A = L + SE)
Revenue - ANS ✔✔"top-line"
represents the sale of goods and services
it is recorded when earned (even though cash might not have been received at the time of
transaction)
, Expenses - ANS ✔✔netted against revenue to arrive at net income
COGS (directly associate with good production), SG&A (indirectly associated with production),
interest expense (expense related to paying debt holders periodic payments), taxes,
depreciation expense (non-cash expense accounting for the use of PP&E, often imbedded
within COGS and SG&A)
Net income - ANS ✔✔"bottom-line"
revenue-expenses
the profitability available to common shareholder's after debt payments have been made
(interest expense)
EPS (earnings per share) - ANS ✔✔portion of a company's profit allocated to each outstanding
share of common stock
EPS = (net income - dividends on preferred stock)/weighted average shares outstanding
Cash flow statement - ANS ✔✔While cash is not necessarily received when a sale occurs, the
income statement still records the sale. As a result, the income statement captures all the
economic transactions of the business.
The cash flow statement is needed because the income statement uses what is called accrual
accounting. In accrual accounting, revenues are recorded when earned regardless of when cash
is received (revenue includes sales using cash and made on credit A/R)
