Investment Banking interview preparation
Every question below is either traced to a named firm from a public candidate report, or tagged at desk level when we could not trace it. Answers are written the way you would actually say them out loud — answer first, then the mechanism, then the limitation.
100 questions, mapped to the firms that asked them
- Questions
- 100
- Traced to a firm
- 100
- Firms
- 46
- Updated
- September 2026
001Walk me through the three financial statements and how they connect.Goldman SachsInvestment Banking · New York · 2026Guggenheim SecuritiesHealthcare · Glen Allen · 2026Piper SandlerInvestment Banking · New York · 2026Truist SecuritiesReal Estate · Atlanta · 2026Moody'sCorporate · New York · 2022
Say this
The income statement shows profitability over a period, the balance sheet is a snapshot of what the company owns and owes at a point in time, and the cash flow statement reconciles the two by tracking the actual cash that moved. They link through net income and cash.
Then walk it
- Net income is the bottom of the income statement. It becomes the top line of the cash flow statement.
- On the cash flow statement you add back non-cash charges like depreciation, adjust for working capital changes, then run through investing and financing.
- The ending cash number flows to the top of the balance sheet as the cash balance.
- Net income also flows into retained earnings in shareholders' equity, less any dividends. That is the second link.
- So the balance sheet balances because both sides of net income land in it: the cash it generated on the asset side, the earnings it retained on the equity side.
Where candidates lose it
Reciting the three statements as three separate definitions and stopping. The question is entirely about the linkage. Say the two connection points out loud, net income into retained earnings and ending cash onto the balance sheet, or you have not answered it.
Expect next
- Which statement would you look at first if you could only pick one, and why?
- A company is profitable but running out of cash. Where do you look?
- Why does the balance sheet actually balance?
Reported by candidates at Goldman Sachs (Investment Banking, New York, 2026); Guggenheim Securities (Healthcare, Glen Allen, 2026); Piper Sandler (Investment Banking, New York, 2026); Truist Securities (Real Estate, Atlanta, 2026); Moody's (Corporate, New York, 2022). Source: Wall Street Oasis.
003Walk me through the three statements at the point of purchase and then after year one, given $100 of deferred revenue over two years.Centerview PartnersInvestment Banking · New York · 2026Piper SandlerInvestment Banking · Houston · 2026
Say this
At the moment of sale, cash goes up $100 and deferred revenue, a liability, goes up $100. Nothing touches the income statement yet. After year one, $50 is recognised as revenue, so the liability halves and earnings finally show up.
Then walk it
- Day one: cash up $100 on the asset side, deferred revenue up $100 on the liability side. Income statement untouched, because you have been paid but have not delivered.
- Year one: recognise $50 of revenue. At a 25% tax rate that is $37.50 of net income, assuming no costs for simplicity.
- Cash flow: net income up $37.50, then a working capital adjustment of minus $50 as deferred revenue unwinds. So cash from operations is minus $12.50 for the year, which is just the tax you paid.
- Balance sheet: cash down $12.50 from the year-one peak, deferred revenue down to $50, retained earnings up $37.50.
- The economic story is that a subscription business collects cash long before it books profit. That is why deferred revenue growth is a leading indicator.
Where candidates lose it
Recognising the revenue on day one. Cash received is not revenue earned. Also, candidates forget the working capital drag in year one and end up with a balance sheet that does not balance. Do the liability and the revenue in the same breath.
Expect next
- Would you rather own a business with growing or shrinking deferred revenue, and why?
- How does deferred revenue affect a DCF?
- What happens to deferred revenue in an acquisition?
Reported by candidates at Centerview Partners (Investment Banking, New York, 2026); Piper Sandler (Investment Banking, Houston, 2026). Source: Wall Street Oasis.
021What are the main valuation methodologies, with the pros and cons of each?Centerview PartnersInvestment Banking · Menlo Park · 2026Piper SandlerInvestment Banking · New York · 2026InvescoAsset Management · New York · 2023
Say this
Three core ones: comparable companies, precedent transactions and DCF. Comps tell you what the market pays today, precedents tell you what buyers paid including control, and a DCF tells you what the cash flows are worth on your own assumptions.
Then walk it
- Trading comps: fast, market-based, easy to defend. But no two companies are truly comparable, and if the whole sector is mispriced your answer inherits that.
- Precedent transactions: captures the control premium and what strategic buyers actually paid. But deals are stale, each had its own circumstances, and disclosure is patchy.
- DCF: the only method grounded in the actual economics, and it forces you to state your assumptions. But it is enormously sensitive to WACC and terminal value, so it can be made to say almost anything.
- Situational ones sit alongside: LBO analysis for a floor value a sponsor would pay, sum of the parts for conglomerates, NAV for asset-heavy or real estate businesses, and dividend discount for banks.
- In practice you show all of them as a football field and argue for a range, because the overlap between methods is more persuasive than any single number.
Where candidates lose it
Listing the three and stopping when the question explicitly asked for pros and cons. Also, claiming DCF is 'the most accurate'. It is the most theoretically sound and the most easily manipulated, and saying both is what makes you sound credible.
Expect next
- Rank the four methodologies from highest to lowest value and explain why.
- Which would you weight most for a company like this?
- When would you not use a DCF at all?
Reported by candidates at Centerview Partners (Investment Banking, Menlo Park, 2026); Piper Sandler (Investment Banking, New York, 2026); Invesco (Asset Management, New York, 2023). Source: Wall Street Oasis.
086What are the formulas for net revenue retention, gross retention and churn?Piper SandlerInvestment Banking · Burlingame · 2026
Say this
All three measure the same cohort a year later. Gross retention counts only what you kept, capped at 100 percent. Net retention adds expansion, so it can exceed 100. Churn is the revenue you lost as a percentage of what you started with.
Then walk it
- Gross revenue retention: starting recurring revenue from a cohort, less churn and downgrades, divided by starting revenue. Expansion is excluded, so it can never exceed 100 percent.
- Net revenue retention: starting revenue, less churn and downgrades, plus upsell and expansion, divided by starting revenue. Above 100 percent means the base grows by itself.
- Gross churn: revenue lost divided by starting revenue. It is one minus gross retention. Logo churn counts customers rather than revenue, and the two can diverge sharply if you lose many small accounts or one large one.
- The critical rule: neither retention metric includes revenue from new customers. Mixing new business into retention is the most common error and it flatters the number badly.
- Benchmarks worth knowing: best-in-class enterprise SaaS runs gross retention above 90 percent and net above 120. SMB software runs materially lower on both because small customers fail.
- Why it matters for valuation: net retention above 110 percent means the business compounds without selling, which is exactly what justifies a high revenue multiple.
Where candidates lose it
Including new customer revenue in the retention calculation. It is a cohort metric. And not knowing which one can exceed 100 percent, which immediately reveals whether you have actually used these numbers.
Expect next
- What is the rule of forty?
- Which matters more for valuation, growth or retention?
- Why can logo churn and revenue churn diverge?
Reported by candidates at Piper Sandler (Investment Banking, Burlingame, 2026). Source: Wall Street Oasis.
Firm tags come from public, anonymous candidate reports on Wall Street Oasis: strong signal, not sworn testimony. Firms are named as the places a question was reported, not as partners of Fin Maverick. Answers are written for this page to show how to think out loud; they are not scripts to recite.