Investment Banking interview preparation

Questions

100

Traced to a firm

100

Firms

46

Updated

September 2026

Asked at

All firmsTSTruist Securities10Rothschild & Co8Centerview Partners7CSCredit Suisse7HWHarris Williams6Houlihan Lokey6Lazard6Mizuho6Barclays5Citi5Deutsche Bank5Evercore5Moelis & Company5MSMorgan Stanley5Piper Sandler5RCRBC Capital Markets5Goldman Sachs4Nomura4TD Securities4Bank of America3GSGuggenheim Securities3J.P. Morgan3Jefferies3Moody's3Perella Weinberg Partners3WPWarburg Pincus3WBWilliam Blair3HSBC2Lincoln International2Scotiabank2TPTPG2UBS2Wells Fargo Securities2Advent International1Apollo Global Management1Bain Capital1Balyasny Asset Management1BLBlackRock1BPBNP Paribas1General Atlantic1Invesco1Morningstar1PIMCO1STSociété Générale1SSState Street1WMWellington Management1

Topic

All topicsAccounting14Valuation21M&A10Markets and deals10Capital markets3LBO8Leveraged finance3Restructuring2Credit3Debt capital markets2Capital structure2Case and estimation11Brainteasers6Fit5

Level

AnyCoreIntermediateHard

Type

AnyTechnicalCaseBrainteaserFitMarket view

1. 010I am showing you a set of financials where one number is wrong. Find the error.AccountingHardsuperdayJefferiesInvestment Banking · New York · 2025

   Say this

   I would check whether the balance sheet balances first, then whether the cash flow statement ties to the change in cash, then whether the income statement subtotals add. One of those three checks will catch almost any planted error.

   Then walk it

   1. First test: do assets equal liabilities plus equity? If not, the error is a balance sheet line or a missing retained earnings flow.
   2. Second test: does ending cash on the cash flow statement match the balance sheet cash? A break here points to a missing working capital or financing line.
   3. Third test: does net income on the cash flow statement match net income on the income statement? People plant errors right there.
   4. Then sanity-check the ratios. A gross margin that moved 800 basis points with no explanation, or D&A larger than gross PP&E, is usually the plant.
   5. I would say my checks out loud as I run them, so you can see the process even if I have not found it yet.

   Where candidates lose it

   Going silent and hunting line by line. This question tests whether you have a systematic tie-out routine, not whether you have sharp eyes. Narrate the three checks; the process is the answer.

   Expect next

   • You found it. What would you do next if this were a live client model?
   • Which single ratio tells you most about earnings quality?
   • How would you audit a model you inherited from a departing analyst?

   Reported by candidates at Jefferies (Investment Banking, New York, 2025). Source: Wall Street Oasis.

2. 014Walk me through what OpenAI's income statement probably looks like.AccountingHardsuperdayLazardInvestment Banking · San Francisco · 2026

   Say this

   Large and fast-growing revenue from subscriptions and API usage, a gross margin far below normal software because inference costs real compute, then enormous R&D and compute spend that puts operating income deeply negative.

   Then walk it

   1. Revenue splits into consumer subscriptions, enterprise seats, and API consumption. The API line is usage-based, so it behaves more like a utility than like seat-based SaaS.
   2. Cost of revenue is the interesting part: every query costs GPU time. That is why gross margin sits well below the 75 to 85 percent you would expect from software.
   3. Below that, R&D dominates, and most of it is training compute plus a small number of very expensive people.
   4. Sales and marketing is unusually light for the growth rate, because distribution has been largely organic.
   5. So the shape is high growth, compressed gross margin, and a big operating loss funded by capital rather than cash flow. If I were valuing it I would care most about whether inference cost per query is falling faster than usage is rising.

   Where candidates lose it

   Treating it as generic SaaS with 80% gross margins. The entire point of the question is whether you understand that inference is a variable cost of goods sold. Name that and you have answered it, even if every number you guess is wrong.

   Expect next

   • How would you value it then?
   • What would you need to believe for this to be worth its last round?
   • Compare the business model to Microsoft's.

   Reported by candidates at Lazard (Investment Banking, San Francisco, 2026). Source: Wall Street Oasis.

3. 034How would you value a pre-revenue healthcare company?ValuationHardsuperdayPiper SandlerInvestment Banking · New York · 2026Moelis & CompanyMergers and Acquisitions · Los Angeles · 2022

   Say this

   A risk-adjusted DCF built asset by asset. For each drug candidate, forecast peak sales after launch, discount back, then multiply by the cumulative probability of clinical and regulatory success for that phase.

   Then walk it

   1. Value each pipeline asset separately. A Phase III candidate and a preclinical one are completely different risks and cannot share a discount rate.
   2. For each asset: estimate the addressable patient population, penetration, price and duration of therapy to build peak sales, then shape the ramp and the patent cliff.
   3. Apply probability of technical and regulatory success. Industry benchmarks run roughly 60 to 70 percent from Phase III, around 30 percent from Phase II, and low single digits from preclinical.
   4. Discount at a high rate, often 10 to 15 percent, and net off the cash burn until launch. Then sum the assets and add the cash on the balance sheet.
   5. Cross-check against what the market pays. EV per pipeline asset by phase, precedent biotech M&A, and the last private round. And say plainly that the answer is a wide range, because a single readout can move it by a factor of three.

   Where candidates lose it

   Reaching for revenue multiples when there is no revenue, or building one DCF for the whole company. The technique is per-asset and probability-weighted. If you cannot name roughly what a Phase II success rate looks like, you have not prepared the sector.

   Expect next

   • What probability would you use for a Phase II asset?
   • How do you handle the patent cliff?
   • What would you cross-check this against?

   Reported by candidates at Piper Sandler (Investment Banking, New York, 2026); Moelis & Company (Mergers and Acquisitions, Los Angeles, 2022). Source: Wall Street Oasis.

4. 040Would Blackstone or Nike pay more to acquire Adidas, and why?M&AHardsuperdayNomuraInvestment Banking · New York · 2026

   Say this

   Nike, on economics. A strategic buyer can pay for synergies a sponsor cannot: overlapping supply chain, shared distribution and marketing scale. Blackstone only has financial engineering and whatever operational improvement it can drive alone.

   Then walk it

   1. Nike's ceiling is intrinsic value plus synergies. Procurement, logistics, retail footprint and back office overlap are all real, so the synergy pool is large.
   2. Blackstone's ceiling is whatever price still clears its target return, typically a low-to-mid twenties IRR over five years. No synergies, so the value has to come from leverage, multiple expansion and operational improvement.
   3. So on paper the strategic wins, and that is the standard answer.
   4. But the deal would never happen for Nike. Combining the two largest athletic brands would be blocked on competition grounds in every major market. A buyer who cannot close cannot be the highest bidder in any real sense.
   5. So the honest answer is: Nike can pay more and will not be allowed to; Blackstone can actually transact. And a sponsor can sometimes win anyway on speed, certainty and no antitrust review, which is why sellers do not always take the highest nominal number.

   Where candidates lose it

   Giving the textbook 'strategics pay more' answer without noticing that this particular pairing is an antitrust impossibility. The firm names were chosen deliberately. Spotting that is the whole test.

   Expect next

   • Who typically pays more, a sponsor or a strategic?
   • Who would be a realistic buyer then?
   • When does a seller take the lower bid?

   Reported by candidates at Nomura (Investment Banking, New York, 2026). Source: Wall Street Oasis.

5. 045Based on the financials in front of you, would you advise this company to sell or not?M&AHardsuperdayHWHarris WilliamsInvestment Banking · Richmond · 2024Lincoln InternationalMergers and Acquisitions · New York · 2025

   Say this

   I would answer the question directly with a recommendation, then defend it on three axes: where the business is in its own trajectory, where the market is in its cycle, and what the owner actually wants.

   Then walk it

   1. Sell into strength. If margins have just peaked, growth is decelerating, and the sector is trading at a cyclical high multiple, that is the moment. Buyers pay for the next three years, not the last three.
   2. Hold if there is a visible, fundable value-creation step the current owner can capture: a margin programme half done, a new facility about to come online, a contract about to be signed. Let the buyer pay for the result, not the plan.
   3. Then the owner's own position. A founder with all their net worth in one asset has a diversification reason to sell that has nothing to do with the multiple. A partial sale can solve that.
   4. Test the buyer universe before recommending a process. A thin buyer list means a weak auction and a weak price, whatever the financials say.
   5. Then commit. Something like: given decelerating growth, peak margins and a deep strategic buyer list, I would run a process now and target the strategics.

   Where candidates lose it

   Hedging. Middle-market bankers ask this to see whether you can make a recommendation on incomplete information. Saying 'it depends' and stopping is a fail. Pick a side, then name what would change your mind.

   Expect next

   • Who would be a dark horse buyer?
   • Build me the buyer universe.
   • What would change your recommendation?

   Reported by candidates at Harris Williams (Investment Banking, Richmond, 2024); Lincoln International (Mergers and Acquisitions, New York, 2025). Source: Wall Street Oasis.

6. 046Who would be a dark horse candidate to buy a pen manufacturer?M&AHardsuperdayHWHarris WilliamsMergers and Acquisitions · Richmond · 2025

   Say this

   I would look for buyers who want the capability rather than the product. An injection-moulding or precision-plastics group buying for the manufacturing asset, or a promotional-products and corporate-gifting business buying for the channel.

   Then walk it

   1. The obvious buyers are other stationery brands and their sponsors. Those are not dark horses, so I would name them and move past them.
   2. The manufacturing angle: a pen is a high-volume precision plastics and micro-assembly business. A contract manufacturer in medical devices or cosmetics packaging could want that capacity and tolerance capability.
   3. The channel angle: whoever owns the shelf. A promotional products distributor, or a corporate gifting platform, buys the brand as a hook for a much larger merchandising catalogue.
   4. The brand angle: luxury. If the target has any premium line, a luxury goods group could take the brand and abandon the volume business entirely. That is a different valuation basis, brand not EBITDA.
   5. And the adjacency angle: an office-products distributor integrating backwards, or an Asian manufacturer buying Western distribution and brand. Each of these values a different asset inside the same company, which is the whole point of building a buyer universe properly.

   Where candidates lose it

   Naming only competitors. The word 'dark horse' means they want to see whether you can decompose the company into its separate assets, manufacturing, brand, channel, and find who values each one most. Structure the answer by asset, not by company.

   Expect next

   • Which of those pays the most?
   • How would you approach them differently in a process?
   • How would you value it for a luxury buyer versus a manufacturer?

   Reported by candidates at Harris Williams (Mergers and Acquisitions, Richmond, 2025). Source: Wall Street Oasis.

7. 054Do a paper LBO. EBITDA of $100, bought at 10x, five times leverage, exit at 10x in five years, EBITDA grows to $150, all cash sweeps to debt.LBOHardsuperdayBain CapitalGeneralist · Boston · 2024WPWarburg PincusPrivate Equity · New York · 2014

   Say this

   Entry equity is $500. Exit enterprise value is $1,500 less remaining debt. If the business repays roughly $250 of the $500 of debt over five years, exit equity is about $1,250, so 2.5 times the money and roughly a 20 percent IRR.

   Then walk it

   1. Entry: $100 EBITDA at 10 times is $1,000 enterprise value. Debt at five times EBITDA is $500, so the sponsor puts in $500.
   2. Cash flow: EBITDA ramps from $100 to $150. Say average EBITDA over the period is $125. Interest on $500 at 8 percent is about $40. Take off CapEx of $25, working capital of $5, and tax on EBIT.
   3. That leaves roughly $50 a year of cash to sweep, so about $250 of debt repaid over five years. Ending debt is $250.
   4. Exit: $150 EBITDA at 10 times is $1,500 enterprise value, less $250 debt, equals $1,250 of equity.
   5. Return: $1,250 on $500 is 2.5 times. The rule of thumb is that 2.0 times over five years is about 15 percent and 2.5 times is about 20 percent, so call it 20 percent.
   6. Then attribute it: EBITDA grew 50 percent and debt halved. No multiple expansion needed, which is why this deal would clear an investment committee.

   Where candidates lose it

   Getting lost in precision. Round aggressively, announce every assumption, and keep the arithmetic in whole numbers you can do out loud. And know the IRR rule of thumb, because reaching for a calculator is the tell that you have never done one.

   Expect next

   • What if you exit at 8 times instead?
   • If I make 8 times my money in 6 years, what is my IRR?
   • Which would you rather have, 25 percent IRR over 5 years or 30 percent over 3?

   Reported by candidates at Bain Capital (Generalist, Boston, 2024); Warburg Pincus (Private Equity, New York, 2014). Source: Wall Street Oasis.

8. 063Given this capital structure, what is the recovery on each claim?RestructuringHardsuperdayHoulihan LokeyRestructuring · New York · 2026

   Say this

   Value the enterprise first, then pay it out down the waterfall in strict seniority until it runs out. Whichever tranche the value runs out in is the fulcrum security, and that is where the equity ends up after the restructuring.

   Then walk it

   1. Establish enterprise value. In distress I would use a distressed multiple on normalised EBITDA and cross-check against a liquidation value, because the two set a range.
   2. Then the waterfall: super-priority and DIP financing first, then secured claims in order of lien priority, then unsecured bonds, then subordinated debt, then preferred, then common.
   3. Work down until the value is exhausted. Say enterprise value is $600, the revolver and term loan total $400 and recover in full, and the unsecured bonds are $400. They receive the remaining $200, so a 50 percent recovery.
   4. Those bonds are the fulcrum. They are the class that gets converted into the new equity, which is why distressed funds buy the fulcrum, not the safest paper.
   5. Everything below the fulcrum, subordinated debt and common equity, recovers nothing in a strict waterfall. In practice they often receive a small stub or warrants to buy consent and avoid a contested plan, which is a negotiation outcome rather than an entitlement.

   Where candidates lose it

   Jumping to the waterfall before establishing enterprise value. You cannot allocate what you have not measured. And missing the fulcrum concept entirely, which is the single most important idea in the discipline.

   Expect next

   • Which security would you buy?
   • What is the absolute priority rule and when is it violated?
   • What section of the indenture deals with payment waterfalls?

   Reported by candidates at Houlihan Lokey (Restructuring, New York, 2026). Source: Wall Street Oasis.

9. 066If you were in a meeting with the CFO as the lead analyst, what would you ask?CreditHardsuperdayMoody'sCorporate Finance · New York · 2018

   Say this

   I would ask about the durability of revenue, the operating leverage in the cost base, and what could stop them paying the debt. Three areas: quality of revenue, quality of cost, and capital allocation intent.

   Then walk it

   1. Revenue quality: how much is contracted or recurring, what is the retention rate of last year's customers, what is the concentration in the top five, and how is pricing holding.
   2. Cost and margin: how much of the cost base is fixed against variable, so I know what happens to margin if volume drops 15 percent. That is the operating leverage question and it drives the downside case.
   3. One-time costs: what charges hit this year that will not recur, and equally, what recurring costs have been classified as one-time. That is the quality-of-earnings question and CFOs answer it carefully.
   4. Capital allocation: what is the intent on dividends, buybacks and acquisitions, and where does leverage sit in their priorities. A CFO who will defend the rating behaves very differently from one who will lever up for a buyback.
   5. And the direct question: what keeps you up at night about the next 18 months? The answer, and the hesitation before it, is usually the most informative thing in the meeting.

   Where candidates lose it

   Asking for information you could get from the filings. A CFO meeting is for intent, judgement and things not disclosed. Asking 'what was revenue last year' wastes the access and signals you did not read the 10-K.

   Expect next

   • How would you qualitatively assess an entity?
   • What would you do if their answers contradicted the filings?
   • Which single answer would most change your rating?

   Reported by candidates at Moody's (Corporate Finance, New York, 2018). Source: Wall Street Oasis.

10. 082Why should I buy your college, and how much would you sell it for?Case and estimationHardsuperdayWMWellington ManagementInvestment Research · Boston · 2024WMWellington ManagementEquity Research · Boston · 2024

    Say this

    Pitch it as a subscription business with pricing power and a real estate portfolio attached. Revenue is tuition times enrolment plus research grants and endowment income; the assets are the campus and the brand.

    Then walk it

    1. The investment case: extremely sticky revenue, since a student enrolled is contracted for three or four years, pricing power that has historically exceeded inflation, and a brand that is effectively impossible to replicate.
    2. Revenue build: enrolment times net tuition after scholarships, plus housing and dining, plus research funding, plus endowment draw. Be explicit that gross tuition overstates it badly because of discounting.
    3. Cost base: mostly faculty and staff, largely fixed, which means high operating leverage in both directions. A 10 percent enrolment drop is devastating; a 10 percent rise is almost pure margin.
    4. Valuation on two bases and take the higher. As a going concern, a DCF or an EBITDA multiple on the operating surplus. As an asset play, the campus real estate plus the endowment, which for many institutions exceeds the operating value.
    5. Then the risks that make the price: demographic decline in the applicant pool, regulatory dependence on public funding and visa policy for international students, and the fact that you cannot actually cut faculty quickly. And I would flag that the brand is inseparable from the non-profit status, so a buyer might destroy the asset by acquiring it.

    Where candidates lose it

    Treating it as a whimsical question. It is a full valuation case wearing a joke. The two highest-value moves are separating gross from net tuition, and recognising that the real estate and endowment may be worth more than the operations.

    Expect next

    • How would you IPO it?
    • How would a college increase revenue?
    • What would you do in the first year as owner?

    Reported by candidates at Wellington Management (Investment Research, Boston, 2024); Wellington Management (Equity Research, Boston, 2024). 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.