How to answer this Analytical/Technical interview question about Cash Flow Management for Entry-Level Financial Analyst?

What strategies would you use to manage cash flow effectively?

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Financial Analyst

Analytical/Technical

Asked at

JPMorgan Chase

Difficulty :

Hard

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Explanation

This question assesses your ability to optimize cash flow, a critical aspect of financial management. Recruiters are looking for your understanding of strategies like monitoring receivables, managing payables, and forecasting. A great answer demonstrates practical application and measurable results. Avoid generic responses or failing to address key cash flow drivers.

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Answer Example

To manage cash flow effectively, I would start by creating a cash flow forecast to predict inflows and outflows accurately. I’d ensure timely invoicing and follow up on receivables to reduce collection periods. On the outflow side, I’d negotiate extended payment terms with suppliers where possible. For example, during a group project, I implemented a cash flow tracker that helped us identify timing gaps, reducing the funding shortfall by 15%.

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