Morningstar Data Analytics and Finance Interview Questions and Answers

March 5, 2024

In the competitive landscape of finance and data analytics, companies like Morningstar stand out as leaders in providing investment research, data, and insights to empower investors worldwide. For professionals aspiring to join such esteemed organizations, acing the interview process is key. Whether you’re delving into financial analytics, exploring market trends, or deciphering complex datasets, Morningstar’s interview questions are designed to assess your skills, knowledge, and ability to thrive in this dynamic field.

Let’s delve into some common data analytics and finance interview questions you might encounter when vying for a coveted role at Morningstar, along with insights to help you prepare and shine during your interview

Table of Contents

Excel questions

Question: What are the different types of cell referencing in Excel?

Answer: There are three main types of cell referencing:

Relative Reference: Adjusts when the formula is copied to another cell. For example, if you copy a formula from cell A1 to B1, a reference to cell A2 becomes a reference to B2.
Absolute Reference: Remains constant when the formula is copied. It is indicated by using a dollar sign ($) before the column letter and row number, like $A$1.
Mixed Reference: Combines relative and absolute referencing, where either the column or the row remains constant. For example, $A1 or A$1.

Question: How would you remove duplicate values in a dataset using Excel?

Answer: To remove duplicates, you can use the “Remove Duplicates” feature:

Select the range of cells or the entire column.

Go to the “Data” tab, then click on “Remove Duplicates.”

Choose the column(s) where you want to remove duplicates and click “OK.”

Intermediate Excel Skills

Question: Explain the purpose of PivotTables and how to create one.

Answer: PivotTables are used to summarize, analyze, explore, and present data from large datasets. To create a PivotTable:

Select the dataset or range you want to analyze.

Go to the “Insert” tab, then click on “PivotTable.”

Choose the location for the PivotTable (new worksheet or existing worksheet) and click “OK.”

Drag fields into the “Rows,” “Columns,” “Values,” or “Filters” areas to create the desired summary.

Question: How can you create a drop-down list in Excel?

Answer: To create a drop-down list:

Select the cell or cells where you want the drop-down list.

Go to the “Data” tab, then click on “Data Validation.”

In the “Allow” box, select “List.”

Enter the source of the list (e.g., a range of cells or comma-separated values).

Click “OK.”

Question: How would you create a macro in Excel?

Answer: To create a macro:

Go to the “Developer” tab (if not visible, enable it in Excel options).

Click on “Record Macro.”

Give the macro a name, assign a shortcut key if desired, choose where to store it, and click “OK.”

Perform the actions you want to record.

Click on “Stop Recording” when done.

To run the macro, use the shortcut key or go to the “Developer” tab and click “Macros.”

Question: How can you quickly find and remove duplicate values in Excel?

Answer:

Select the range of cells.

Go to the “Data” tab and click on “Remove Duplicates.”

Choose the columns where you want to remove duplicates and click “OK.”

Question: Explain the purpose of the Freeze Panes feature in Excel and how to use it.

Answer: The Freeze Panes feature allows you to lock rows or columns so that they remain visible when you scroll through a large dataset.

To freeze the top row: Go to the “View” tab, click on “Freeze Panes,” and select “Freeze Top Row.”

To freeze the first column: Go to the “View” tab, click on “Freeze Panes,” and select “Freeze First Column.”

Financial Questions

Question: What is the P/E ratio?

Answer: The Price-to-Earnings (P/E) ratio is a financial metric used to evaluate the valuation of a company’s stock. It measures the current share price relative to its earnings per share (EPS). Investors often use the P/E ratio to assess whether a stock is overvalued, undervalued, or fairly priced compared to its peers or the market as a whole.

Question: What is appreciation?

Answer: Appreciation, in a financial context, refers to an increase in the value of an asset over time. It is commonly used to describe the rise in the price or worth of various investments such as stocks, real estate, currencies, or collectibles. Appreciation is a key concept in investing, as it represents a potential source of profit for investors.

Question: How does cash flow work?

Answer: Cash flow refers to the movement of money into and out of a business or financial asset over a specific period. It is a crucial aspect of financial management as it provides insights into the liquidity, operational efficiency, and overall financial health of an entity. Understanding how cash flow works involves examining the sources and uses of cash to assess the ability of a business to meet its financial obligations, invest in growth opportunities, and generate returns for investors.

Question: What is an Income statement?

Answer: An Income Statement, also known as a Profit and Loss (P&L) Statement, is a financial statement that summarizes a company’s revenues, expenses, and profits or losses over a specific period, typically a quarter or a fiscal year. It provides valuable insights into a company’s ability to generate profit from its core operations and is a crucial tool for investors, analysts, and managers to assess the financial performance and profitability of a business.

Question: What is a Balance Sheet?

Answer: A Balance Sheet is a financial statement that provides a snapshot of a company’s financial position at a specific point in time, typically the end of a quarter or fiscal year. It presents a summary of a company’s assets, liabilities, and shareholders’ equity, showcasing what the company owns (assets), what it owes (liabilities), and the ownership interest in the company’s assets (shareholders’ equity).

Question: What is a Cash flow statement?

Answer: A Cash Flow Statement is a financial statement that provides a summary of the cash inflows and outflows of a company over a specific period, typically a quarter or a fiscal year. It tracks the sources and uses of cash, helping investors, analysts, and managers understand how cash moves in and out of the business. The Cash Flow Statement is crucial for assessing a company’s liquidity, operational efficiency, and overall financial health.

Question: What is Depreciation?

Answer: Depreciation is an accounting method used to allocate the cost of tangible assets over their useful lives. It is a non-cash expense that reflects the gradual reduction in the value or usefulness of an asset due to wear and tear, obsolescence, or the passage of time. By recognizing depreciation expenses, a company can spread the cost of an asset over its expected useful life, matching the expense with the revenue it helps to generate.

Question: What is Equity?

Answer: In accounting and finance, equity refers to the ownership interest in a company’s assets after deducting its liabilities. It represents the residual claim on assets that remain for the owners or shareholders. In this context, equity is a crucial component of a company’s balance sheet, providing insights into its financial health, value, and ownership structure.

Question: What is Debt?

Answer: Debt refers to an obligation or liability that requires one party, known as the debtor, to repay funds or provide goods or services to another party, known as the creditor. In simple terms, debt is money borrowed by an individual, organization, or government with the agreement to repay the borrowed amount along with interest, typically over a specified period.

Conclusion

Embarking on an interview journey with Morningstar, a powerhouse in finance and data analytics, is an exciting opportunity for any aspiring professional. By mastering these common interview questions and aligning your skills with the company’s vision, you’ll be well on your way to making a lasting impression and securing a rewarding career in the dynamic world of finance and analytics.

Best of luck on your interview journey with Morningstar!