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
011What is the difference between a finance lease and an operating lease, and which one affects valuation?MizuhoInvestment Banking · New York · 2026
Say this
Under current standards both sit on the balance sheet as a right-of-use asset and a lease liability. The difference is the income statement: a finance lease splits into depreciation and interest, while an operating lease stays as a single operating expense.
Then walk it
- Finance lease treats you as the economic owner. Depreciation sits in EBITDA, interest sits below it, so EBITDA is higher.
- Operating lease keeps the full rent inside operating expenses, so EBITDA is lower.
- That means two companies with identical economics can show very different EBITDA depending on classification. It directly distorts EV/EBITDA comps.
- For valuation, the practical answer is that you have to be consistent. Either capitalise leases for everyone and treat the lease liability as debt in the bridge, or treat rent as an operating cost for everyone.
- The mistake that actually costs money is adding the lease liability to net debt while also leaving rent in EBITDA. You have then charged the company twice.
Where candidates lose it
Answering with the pre-IFRS 16 world where operating leases were off balance sheet. That has not been true since 2019. Get the current treatment right, then make the comparability point.
Expect next
- So do you include the lease liability in net debt?
- How would you compare an airline that leases its fleet with one that owns it?
- Which industries does this distort most?
Reported by candidates at Mizuho (Investment Banking, New York, 2026). Source: Wall Street Oasis.
012Do a DuPont analysis for a hospital business.Credit SuisseInvestment Banking · Mumbai · 2020
Say this
DuPont splits return on equity into net margin, asset turnover and leverage. For a hospital the story is almost always thin margins, heavy assets and therefore low turnover, with leverage doing a lot of the work on ROE.
Then walk it
- ROE equals net margin times asset turnover times the equity multiplier. Three levers, and each one tells a different operating story.
- Net margin for a hospital is driven by payer mix and case mix. Private-pay and high-acuity surgical work carry far better margin than government-scheme volume.
- Asset turnover is structurally low, because you have bought land, a building and imaging equipment. The operating metric behind it is occupancy and average revenue per occupied bed.
- That heavy asset base is why leverage matters so much. Hospitals fund expansion with debt, so the equity multiplier is doing real work in the ROE.
- The banker's conclusion: a hospital chain improves ROE mainly by filling existing beds and shifting case mix, not by cutting costs. Incremental occupancy has almost no marginal cost.
Where candidates lose it
Reciting the DuPont formula and stopping. The question names a hospital on purpose. If you cannot say what drives each of the three terms for that specific business, you have shown formula recall and nothing else.
Expect next
- Which of the three levers would you push first?
- What metrics would you ask the CFO for?
- How would this look different for a diagnostics chain?
Reported by candidates at Credit Suisse (Investment Banking, Mumbai, 2020). Source: Wall Street Oasis.
013What is the effect on the three statements of selling an asset?JefferiesEquity Research · New York · 2026
Say this
It depends on whether you sell above or below book value. Say book value is $100 and you sell for $120. You book a $20 gain on the income statement, cash rises by $120, and the asset comes off the balance sheet at $100.
Then walk it
- Income statement: a $20 gain, taxed. At 25% that is $15 of net income.
- Cash flow statement: start from net income at $15, reverse out the full $20 non-cash gain, then show the $120 proceeds in investing. Net cash change is $115, which is the $120 received less the $5 of tax.
- Balance sheet: cash up $115, the asset down $100, retained earnings up $15. It balances.
- The gain gets reversed out of operating cash flow because it is not operating, and the whole proceeds are shown in investing. Otherwise you would count the gain twice.
- If you sold below book you would book a loss, get a tax benefit, and the mechanics run the same way in reverse.
Where candidates lose it
Leaving the gain in cash from operations and also putting the proceeds in investing. That double-counts. The reversal of the gain in the operating section is the entire technical content of this question.
Expect next
- What if you sold it at exactly book value?
- How would this show up in an equity research model?
- Would you adjust EBITDA for the gain?
Reported by candidates at Jefferies (Equity Research, New York, 2026). Source: Wall Street Oasis.
014Walk me through what OpenAI's income statement probably looks like.LazardInvestment 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
- 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.
- 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.
- Below that, R&D dominates, and most of it is training compute plus a small number of very expensive people.
- Sales and marketing is unusually light for the growth rate, because distribution has been largely organic.
- 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.
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.