Private Equity interview preparation

Questions

100

Traced to a firm

83

Firms

40

Updated

September 2026

Asked at

All firmsAdvent International6Apollo Global Management6Audax Group6Carlyle Group6EQT6Silver Lake6Vista Equity Partners6WPWarburg Pincus6HIH.I.G. Capital5Oaktree Capital Management5Platinum Equity5TPTPG5General Atlantic4AMAres Management3Blackstone3Clayton Dubilier and Rice3GSGuggenheim Securities3Insight Partners3Invesco3Lazard3Neuberger Berman3NUNuveen3TSTruist Securities3Bain Capital2HWHarris Williams2Kohlberg Kravis Roberts2Millennium Management2Moody's2Rothschild & Co2WBWilliam Blair2Bessemer Venture Partners1Citi1Evercore1FTFranklin Templeton1Houlihan Lokey1HPS Investment Partners1KKR1Mizuho1MSMorgan Stanley1Sycamore Partners1

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All topicsLBO mechanics7Value creation5Returns2Fund economics9Investment judgement18Valuation6Firm knowledge2Credit and financing9Operations4Due diligence8Career and fit11Sector knowledge4Accounting2Deal structuring7Industry knowledge3Brainteasers3

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1. 043How does depreciation flow through the three statements?AccountingCorefirst roundOaktree Capital ManagementDebt Capital Markets · New York · 2026Moody'sGeneralist · New York · 2022

   Say this

   Take $10 at a 25 percent tax rate. Pre-tax income falls $10, net income falls $7.50, but cash rises $2.50 because depreciation is non-cash and the only real effect is the tax saved.

   Then walk it

   1. Income statement: $10 of depreciation reduces EBIT by $10, so net income is down $7.50 after tax.
   2. Cash flow statement: start at minus $7.50, add back the $10 non-cash charge, so cash from operations rises $2.50.
   3. Balance sheet: cash up $2.50, net PP&E down $10, total assets down $7.50. Retained earnings down $7.50. It balances.
   4. The economic point is the depreciation tax shield: a non-cash charge that generates real cash by reducing tax.
   5. For a sponsor this matters at entry, because purchase accounting writes assets up, which creates additional depreciation and amortisation and therefore an additional tax shield. That step-up is worth real money and gets negotiated.
   6. And for a credit analyst the point is the opposite direction: depreciation approximates the capital the business must eventually respend, so EBITDA overstates the cash available to service debt by roughly the maintenance CapEx.

   Where candidates lose it

   Saying cash falls. It does not. And for a private equity or credit interview specifically, the expected addition is the link to the purchase accounting step-up or to maintenance CapEx. The bare mechanics alone read as a banking answer.

   Expect next

   • Now do $10 of CapEx.
   • How does the step-up in an asset deal change this?
   • Why is EBITDA a poor proxy for cash available to service debt?

   Reported by candidates at Oaktree Capital Management (Debt Capital Markets, New York, 2026); Moody's (Generalist, New York, 2022). Source: Wall Street Oasis.

2. 044Why is EBITDA a poor proxy for cash flow, and what would you use instead?AccountingIntermediatetechnicalPrivate creditLeveraged finance

   Say this

   Because it ignores the three things that actually consume cash: capital expenditure, working capital and taxes, plus interest itself. A business can grow EBITDA every year and never generate a dollar of free cash.

   Then walk it

   1. CapEx is the biggest omission. EBITDA adds back depreciation, which is a proxy for the capital the business must eventually respend. For a capital-intensive business, maintenance CapEx alone can absorb most of EBITDA.
   2. Working capital: a growing business funds receivables and inventory, so cash lags EBITDA persistently.
   3. Cash taxes are real, and they differ from book taxes because of timing differences and loss carryforwards.
   4. Interest and mandatory amortisation come before anything reaches the equity, which is precisely what matters when the business is levered.
   5. And adjusted EBITDA compounds the problem, because the adjustments are the company's own judgement. Recurring restructuring charges and run-rate synergies routinely inflate it.
   6. What I would use: unlevered free cash flow for valuation, and for credit, EBITDA less maintenance CapEx less cash taxes less working capital change, compared against debt service. That is the number that tells you whether the structure survives.

   Where candidates lose it

   Reciting the Buffett line about EBITDA without the specific omissions. Name CapEx, working capital and cash taxes explicitly, and name adjusted EBITDA as a separate problem of judgement rather than of definition.

   Expect next

   • How do you split maintenance from growth CapEx?
   • Which add-backs would you refuse?
   • What coverage ratio would you actually underwrite to?

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.