Investment Banking Interview Questions

Prepare for technical and behavioral investment banking interviews with questions covering the three statements, valuation, DCF, merger models, LBO mechanics, deal discussion and fit.

This practice bank contains role-specific technical and behavioral questions with structured model answers. Visitors can filter by topic and difficulty, bookmark questions and track readiness; five questions per career are available in the free preview.

What to prepare

Accounting and the three statements
Valuation, DCF and WACC
M&A and accretion/dilution
LBO mechanics and returns
Behavioral questions and deal discussion

Representative investment banking interview questions

Accounting: What are the three main financial statements and what is the practical purpose of each?
Accounting: How are the three financial statements interconnected, and why is this interconnection fundamental?
Accounting: If you could only analyze one financial statement to assess a company's financial health, which one would you choose and why that preference?
Accounting: Is it possible for a company to be profitable according to its income statement but still go bankrupt, and how can this happen?
Accounting: Describe the full impact on the three financial statements of a €10 increase in Depreciation & Amortization (D&A) expenses, assuming a 40% tax rate.
Accounting: What is the fundamental distinction between 'depreciation' and 'amortization' in accounting, and why is this distinction relevant?
Accounting: What is Working Capital (WCR or NWC), and why is it important for a company?
Accounting: What is the impact of an increase in Accounts Receivable on a company's cash flow?
Accounting: Where is Cash and Cash Equivalents located on a company's consolidated balance sheet, and how can its change from one period to another be explained?
Accounting: What is goodwill, and how is it recognized and treated on a company's financial statements?
Accounting: How is goodwill specifically created and accounted for during an acquisition?
Accounting: What is goodwill impairment, and what is its impact on a company's financial statements?
Accounting: What is the fundamental difference between accrued expenses and accounts payable on a company's balance sheet?
Accounting: What is deferred revenue, and how is it recognized for accounting purposes?
Accounting: Explain the fundamental difference between cash-basis accounting and accrual accounting, and why the latter is preferred for large corporations.
Accounting: What is the matching principle in accounting, and why is it so important?
Accounting: Describe the immediate impact on the three financial statements when a company purchases a machine for 100€ in cash.
Accounting: Building on the previous example: if, in the following year, the machine is depreciated by 10€, describe the effects on the three financial statements, assuming a 40% tax rate.

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