Investment Banking Analyst Interview Questions: The Technicals and Fit Questions That Come Up Most

Investment banking analyst interview questions come in two halves. Fit questions test why you want the job and whether a team will trust you at 1am. Technical questions test accounting, enterprise value, valuation, LBOs and M&A maths. Most first-round interviews are mainly fit with a few technicals. Superday rounds go deeper, and off-cycle or lateral candidates get more technicals from the start. Below are the 24 questions that come up most, grouped by topic, with what each one tests and a model answer we wrote.

Numbers in the worked examples are illustrative. Learn the logic, not the figures.

Key takeaways

• Investment banking analyst interviews combine fit questions with technicals on accounting, enterprise value, valuation, LBOs and M&A.
• Goldman Sachs describes a video interview of about 30 minutes followed by a Superday of two to five interviews for campus hires, depending on the division.
• The depreciation walk-through, EV versus equity value and a DCF walk-through come up in most technical rounds.
• Lease accounting differs: IFRS 16 moves lease costs below EBITDA, while US GAAP operating leases keep a single straight-line cost, so treat leases consistently in multiples.
• Explain the logic behind each technical answer and tie every fit answer to something you have actually done.

How the process usually runs

The steps are similar across banks in London and New York: online application, tests at some banks, a recorded video interview, then a final round. Goldman Sachs, for example, describes a video interview of approximately 30 minutes for selected applicants, followed by a Superday where it typically runs between two and five interviews for campus hires, depending on the division. Each Superday interviewer usually picks a mix of fit and technical questions, so expect the same technicals more than once on the day.

Fit questions

1. Walk me through your CV. What it tests: a clear, two-minute story that ends at "and that's why I'm here". Model answer (structure): where you started, the two or three experiences that pushed you towards banking, what you learnt in each, and why this role is the logical next step. Don't recite every line. Make sure each line you mention holds up to a follow-up; our financial analyst CV example shows how to write bullets you can defend.

2. Why investment banking? What it tests: motivation that will survive the hours. Model answer: "I want to work on transactions that change a company's direction, and to learn corporate finance by doing it rather than reading about it. The analyst role gives intense exposure to modelling, valuation and how senior bankers advise boards. I've tested that interest through [internship, society, deal you followed], and the part I enjoyed most was [specific task]."

3. Why this bank, and why this team? What it tests: research beyond the league tables. Model answer (structure): one deal or sector strength specific to the team, one conversation with someone who works there, and how both fit what you want to learn. M&A, ECM, DCM, leveraged finance and sector coverage are different jobs, so know which one you're interviewing for.

4. Tell me about a deal you've followed. What it tests: commercial understanding. Model answer (structure): the buyer, target and rough price; the strategic logic; how it was funded; the valuation multiple; and one risk or reason it might not work. Pick one you can discuss for five minutes, not the biggest deal of the year.

5. What does an analyst actually do? What it tests: realistic expectations. Model answer: "Build and update models, prepare pitch books and marketing materials, run comparables, manage data rooms and due diligence lists, and check everything twice. The analyst is the person who knows the numbers in the deck are right."

6. Tell me about a time you worked under real pressure, or made a mistake. What it tests: resilience and honesty. Use a short STAR answer; there are worked examples in our STAR interview examples for finance.

Accounting technicals

7. Walk me through the three financial statements. Model answer: "The income statement shows revenue, expenses and net income over a period. The balance sheet shows assets, liabilities and equity at a point in time, and must balance. The cash flow statement starts from net income, adjusts for non-cash items and working capital to give operating cash flow, then adds investing and financing flows. Net income flows into retained earnings, and the closing cash on the cash flow statement is the cash on the balance sheet."

8. Depreciation goes up by 10. Walk me through the three statements. What it tests: the most common technical. Assume a 25% tax rate (illustrative). Model answer: "Pre-tax income falls by 10, so net income falls by 7.5. On the cash flow statement, net income is down 7.5 but you add back the extra 10 of depreciation, so cash is up 2.5 because of the tax saving. On the balance sheet, PP&E is down 10 and cash up 2.5, so assets are down 7.5; retained earnings are down 7.5, so it balances."

9. If receivables increase, what happens to cash? Model answer: "Cash falls. Revenue was recognised but the cash hasn't been collected, so the increase in receivables is deducted in operating cash flow."

10. How does lease accounting affect EBITDA, and why does it matter for multiples? What it tests: a UK/US difference that trips people up. Model answer: "Under IFRS 16 lessees put most leases on the balance sheet, and the old operating lease expense is replaced by depreciation and interest, both below EBITDA. So IFRS EBITDA is higher. Under US GAAP, operating leases are also on the balance sheet but keep a straight-line cost in a single line above EBITDA. When you compare EV/EBITDA, treat leases consistently: if EBITDA excludes lease costs, include lease liabilities in enterprise value."

Enterprise value questions

11. What's the difference between enterprise value and equity value? Model answer: "Equity value is the value of the business to shareholders: share price times diluted shares. Enterprise value is the value of the operating business to all capital providers: equity value plus debt, preferred stock and non-controlling interests, minus cash. You use EV with metrics that belong to everyone, like EBITDA or revenue, and equity value with metrics that belong to shareholders, like net income."

12. Why do you subtract cash when calculating enterprise value? Model answer: "Cash isn't part of the operating business. A buyer of the whole company effectively gets the cash back, so it reduces the net cost of the business."

13. Can enterprise value be lower than equity value? Model answer: "Yes, when a company has more cash than debt and other claims. Net cash is a negative adjustment."

Valuation and DCF questions

14. What are the main valuation methods? Model answer: "Comparable companies (trading multiples), precedent transactions (multiples paid in past deals), and a DCF (present value of forecast free cash flows). For a sponsor-type buyer you'd add an LBO analysis, which shows what price still hits the required return."

15. Which method usually gives the highest value? Model answer: "Often precedent transactions, because deal multiples include a control premium. But it depends: a DCF with aggressive growth can come out higher. I'd always explain why the methods differ rather than just ranking them."

16. Walk me through a DCF. Model answer: "Forecast unlevered free cash flow over an explicit period, typically five to ten years: EBIT less tax, plus D&A, less capex and the increase in working capital. Estimate a terminal value at the end of the forecast. Discount the cash flows and terminal value at WACC to get enterprise value, then subtract net debt to get equity value and divide by diluted shares for a value per share."

17. How do you calculate WACC? Model answer: "The cost of each source of capital weighted by its share of the capital structure at market values. Cost of equity usually comes from CAPM: the risk-free rate plus beta times the equity risk premium. Cost of debt is taken after tax, because interest is tax-deductible."

18. What are the two ways to calculate terminal value? Model answer: "The perpetuity growth method, which grows final-year free cash flow at a long-term rate below economic growth, and the exit multiple method, which applies an EV/EBITDA multiple to final-year EBITDA. Cross-check one against the other: the implied multiple or growth rate should be sensible."

19. What happens to a DCF valuation if the discount rate goes up? Model answer: "Value falls, because future cash flows are worth less today. The terminal value falls most, since it's the furthest out and usually the largest part of the valuation."

LBO and M&A questions

20. Walk me through a basic LBO. Model answer: "A sponsor buys a company using a lot of debt and some equity. You set the purchase price and funding mix, project cash flows, use free cash flow to repay debt, then assume an exit at a multiple after a holding period (five years is a common modelling assumption). Returns come from the equity value at exit compared with the equity put in, measured as IRR and multiple of money."

21. What makes a good LBO candidate? Model answer: "Stable, predictable cash flows to service debt; low capex needs; a strong market position; room for operational improvement; and a realistic exit route. Assets that can support borrowing help too."

22. Where do LBO returns come from? Model answer: "Three levers: EBITDA growth, paying down debt with cash flow, and exiting at a higher multiple than you paid. Strong deals get most of their return from the first two rather than relying on multiple expansion."

23. Is this acquisition accretive or dilutive? What it tests: quick logic, often with numbers on the spot. Model answer: "Compare what the buyer gives up with what it gets. In an all-stock deal, ignoring synergies, it's accretive if the buyer's P/E is higher than the P/E paid for the target. In a cash or debt deal, compare the after-tax cost of the cash or debt with the target's earnings yield (the inverse of the P/E paid). If the target's earnings yield is higher, the deal is accretive."

24. Pitch me a stock or tell me where the market is. What it tests: whether you follow markets. Model answer (structure): know today's level and recent direction of the main index in your market, the central bank's latest rate decision, and one sector story. For a stock: what the company does, why it's mispriced, one valuation point, and one risk.

How to prepare in the final two weeks

• Say the technicals out loud until they're automatic. The walk-throughs (three statements, depreciation, DCF, LBO) should take under a minute each.
• Prepare two deals and one sector view you can defend under follow-ups.
• Write three or four STAR stories from your own CV: teamwork, pressure, a mistake, leading something. Many questions for FP&A interviews overlap with banking on three-statement links, so that guide is useful extra practice, as are the accounting questions in our Big Four audit interview questions.
• Rehearse against the actual role. Our interview practice tool writes questions for a specific job and your CV and rates each typed answer.
• Plan for volume. Banking applications are competitive and take many attempts; our analysis of how many applications a UK finance job takes helps you set a realistic pipeline.

The candidates who stand out explain the logic behind each technical answer, not just the answer, and tie every fit answer to something they've actually done.

Frequently asked questions

What technical questions are asked in investment banking interviews?

The most common are walking through the three financial statements, how a change in depreciation flows through them, the difference between enterprise value and equity value, the main valuation methods, walking through a DCF and WACC, the basics of an LBO, and whether an acquisition is accretive or dilutive. Superday rounds repeat these with harder follow-ups.

How do I answer "why investment banking?"

Give a reason tied to the work, such as learning corporate finance through live transactions and seeing how senior bankers advise boards. Then show you tested the interest through an internship, society or a deal you followed, and name the task you enjoyed most. Avoid leading with pay or prestige.

What is a Superday in investment banking?

A Superday is the final round: several back-to-back interviews with bankers from analyst to managing director, usually on one day. Goldman Sachs, for example, says it typically runs between two and five interviews for campus hires, depending on the division. Expect a mix of fit and technical questions, often the same technicals more than once.

Are investment banking interview questions the same in London and New York?

Largely, yes. The fit questions and core technicals on accounting, valuation and LBOs are the same. Differences show up in accounting detail: London candidates are more likely to face IFRS questions, such as how IFRS 16 affects EBITDA, while US candidates may be asked about US GAAP, including how operating leases are presented.