Investment-banking interviews are dense and fast: they test your fit (motivation, communication, stamina) and your technical chops (accounting, valuation, markets). Here are 10 must-know questions with clear, credible ways to answer them—so you can practice like a human, not a script.
1) “Walk me through your résumé.”
The goal is a crisp 60–90 seconds with a clear thread: Past → Present → Future.
- Past: highlight 2–3 experiences with quantified impact.
- Present: what you’re doing now and what you’re learning.
- Future: why IB is the logical next step and what you bring (work ethic, detail-orientation, Excel/PowerPoint fluency).
Don’t recite every line—tell a progression.
2) “Why investment banking?”
Show an intrinsic motivation: accelerated learning, deal exposure, responsibility early, work that moves real companies. Anchor it to something you did (an M&A case competition, an acquisition you analyzed in an internship, a finance club project). Close with what you offer: grit, teamwork at odd hours, ownership mentality.
3) “Why our bank?”
Be specific. Mention 2–3 deals or coverage sectors relevant to the office you’re targeting, one cultural element (training, staffing model, rotations), and any meaningful coffee chats. Prove you know where you want to be—and with whom.
4) “Tell me about a recent deal you’re following.”
Use a four-step frame:
- Context: acquirer, target, sector, headline value.
- Strategic rationale: cost/revenue synergies, market share, tech or geographic fit.
- Financing: cash, stock, debt (and why that mix).
- Valuation & risks: EV/EBITDA or P/E, premium to unaffected price, peers; plus risks (antitrust, integration, cyclicality).
Keep it to 60–90 seconds and add one analytic angle (“a 28% premium implies ~2% revenue synergies if the multiple holds”).
5) “How do the three financial statements link together?”
- Income statement: net income flows into retained earnings on the balance sheet.
- Cash flow statement: starts with net income, adds back non-cash (depreciation) and adjusts for working capital and capex to arrive at the change in cash.
- Balance sheet: cash updates, PP&E falls by depreciation (offset by capex), and equity reflects retained earnings (minus dividends). Assets must equal liabilities plus equity.
6) “How do you value a company?”
Three core methods:
- Trading comparables: market multiples (EV/EBITDA, P/E) vs. peers. +Fast; –market-dependent.
- Precedent transactions: prices paid in similar deals. +Includes control premium; –sample size issues.
- DCF: discount free cash flows and add a terminal value. +Fundamental; –sensitive to assumptions.
Add-ons: SOTP for conglomerates and LBO to set a floor (what a sponsor could pay for a target IRR).
7) “Walk me through a DCF.”
- Project operating performance (5–10 years).
- Compute FCF = EBIT(1–t) + D&A – Capex – ΔNWC.
- Use WACC as the discount rate (target capital structure; cost of equity via CAPM; after-tax cost of debt).
- Estimate terminal value via perpetuity growth (g) or exit multiple.
- Discount and sum FCFs + TV = Enterprise Value; subtract net debt to get Equity Value.
Finish with sensitivity tables (WACC, g, margins)